Iceberg Merger
A hypothetical term referring to a merger where the most significant and valuable aspects of the deal are hidden beneath the surface, known only to insiders.
Implications
A type of merger where the acquiring company buys just enough shares to gain control of the target company, often with the intention of restructuring or liquidating the target's assets, and the "iceberg" metaphor refers to the hidden value that the acquirer sees beneath the surface.
Example
Example: A private equity firm executes an iceberg merger by acquiring a controlling stake in a struggling manufacturing company, planning to sell off its valuable assets and shut down unprofitable divisions.
Related Terms
Different from a full merger, which might involve combining all aspects of two companies, an iceberg merger focuses on extracting value from the target's hidden assets, often at the expense of its ongoing operations.
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