DEFINITION of 'SEC Form 425'

The prospectus form that companies must file to disclose information regarding business combination transactions. A business combination can refer to a statutory merger between two or more companies or a statutory consolidation. Companies are required to file prospectus form 425 in accordance with rules 425 and 165 of the Securities Exchange Act of 1933.

BREAKING DOWN 'SEC Form 425'

There are five commonly-referred to types of business combinations known as mergers: conglomerate merger, horizontal merger, market extension merger, vertical merger and product extension merger. The term chosen to describe the merger depends on the economic function, purpose of the business transaction and relationship between the merging companies.

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RELATED FAQS
  1. What is the difference between a merger and an acquisition?

    Learn about the legal differences between a corporate merger and corporate acquisition – terms used when companies are either ... Read Answer >>
  2. How does a merger affect the shareholders?

    Explore the impact of a merger and understand how the process affects shareholders of the newly merged firm in terms of stock ... Read Answer >>
  3. Why do companies merge with or acquire other companies?

    The reasons for company mergers and acquisitions include synergy, diversification, growth, improving competition, and supply ... Read Answer >>
  4. How to Get a Company's Prospectus

    Obtaining a company's prospectus—or other financial documents—is now a simple online task. Read Answer >>
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    Understand the difference between a merger and a hostile takeover, including the different ways one company can acquire another, ... Read Answer >>
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