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Merger Agreement
Establish clear merger terms, approvals, and conditions with this Merger Agreement template.
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Merger Agreement Template
This Merger Agreement (“Agreement”) is entered into as of [Date], by and between:
Company A: [Full Legal Name], a [State/Country] corporation with its principal office at [Address].
Company B: [Full Legal Name], a [State/Country] corporation with its principal office at [Address].
Each a “Party,” together the “Parties.”
1. Background and Purpose
The Parties intend to merge in accordance with applicable law, with Company [A/B] continuing as the surviving entity. This Agreement sets forth the terms, conditions, and obligations of the merger.
2. Structure of the Merger
a. Statutory Merger: Pursuant to [statute/corporate law], Company B shall merge with and into Company A.
b. Surviving Entity: Company A shall be the surviving corporation and shall continue its corporate existence.
c. Effective Date: The merger shall become effective upon filing of Articles of Merger with [Secretary of State or regulatory body] (the “Effective Date”).
3. Consideration and Exchange of Shares
a. Exchange Ratio: Each issued and outstanding share of Company B shall be converted into [X] shares of Company A common stock.
b. Cash Consideration (if applicable): In addition to stock, each Company B shareholder shall receive $[Amount] per share.
c. Cancellation of Shares: Shares of Company A outstanding prior to the Effective Date shall remain outstanding.
d. Dissenters’ Rights: Dissenting shareholders shall be entitled only to rights provided by [corporate statute].
4. Governance of the Surviving Entity
a. Articles and Bylaws: The articles of incorporation and bylaws of Company A shall continue, unless amended in accordance with law.
b. Board Composition: The Board of Directors of the surviving entity shall consist of [X] directors designated by Company A and [Y] directors designated by Company B.
c. Officers: The officers of the surviving entity shall be appointed by the new Board at closing.
5. Representations and Warranties
Each Party represents and warrants to the other that:
a. It is duly organized, validly existing, and in good standing under its jurisdiction of incorporation.
b. It has corporate power and authority to enter into this Agreement and consummate the merger.
c. Execution and delivery of this Agreement has been duly authorized.
d. Financial statements provided are accurate in all material respects.
e. There are no undisclosed liabilities that would materially affect the merger.
6. Covenants Pending Closing
Each Party covenants to:
a. Operate its business in the ordinary course until the Effective Date.
b. Refrain from issuing new securities, incurring material liabilities, or making unusual capital expenditures without consent.
c. Provide reasonable access to records, facilities, and employees for due diligence.
d. Call a shareholder meeting and recommend approval of this Agreement.
7. Conditions to Closing
The obligations of the Parties to consummate the merger are subject to:
a. Shareholder approval of each Party in accordance with governing law.
b. Regulatory approvals, including antitrust clearance where applicable.
c. Accuracy of representations and warranties as of the Effective Date.
d. Absence of injunctions or legal restraints prohibiting the merger.
8. Termination
This Agreement may be terminated prior to the Effective Date if:
a. The merger is not consummated by [Date], unless extended by mutual consent.
b. A Party materially breaches this Agreement and fails to cure.
c. Required approvals are denied or revoked.
d. By mutual written consent of both Parties.
9. Effect of Termination
Upon termination, this Agreement shall be void, except for provisions relating to confidentiality, expenses, and governing law, which shall survive.
10. Expenses
Each Party shall bear its own costs and expenses in connection with this Agreement and the merger, unless otherwise agreed in writing.
11. Governing Law
This Agreement shall be governed by the laws of [State/Country], without regard to conflicts of law principles.
12. Entire Agreement
This Agreement constitutes the entire agreement between the Parties with respect to the merger and supersedes all prior discussions or understandings. Amendments must be in writing signed by both Parties.
13. Counterparts and Electronic Signatures
This Agreement may be executed in counterparts, each deemed an original, and delivered electronically.
Signatures
Company A:
Name: ________________________
Title: _________________________
Date: _________________________
Company B:
Name: ________________________
Title: _________________________
Date: _________________________
Details
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Merger Agreement
MERGER AGREEMENT FAQ
What is a Merger Agreement?
A Merger Agreement is a binding legal contract that sets forth the framework under which two or more companies combine into a single entity. It describes the structure of the merger, consideration to be exchanged, responsibilities of each party, and closing conditions.
Why is a Merger Agreement important?
It ensures that both companies, their shareholders, and regulatory bodies understand exactly how the transaction will proceed. By documenting consideration, governance, liabilities, and required approvals, it provides certainty and reduces the risk of disputes or failed closings.
When should you use a Merger Agreement?
Use a Merger Agreement whenever two or more companies decide to combine ownership and operations—whether through statutory merger, stock-for-stock exchange, or asset transfer. It is essential before submitting merger filings to regulators or seeking shareholder approval.
What should a Merger Agreement include?
It should clearly state the merging parties, structure of the merger, treatment of shares, consideration paid, governance of the surviving entity, closing conditions, representations and warranties, termination rights, and governing law. Attachments may include financial statements, disclosure schedules, and regulatory filings.
Are regulatory and shareholder approvals required?
Yes. Depending on jurisdiction, approvals from shareholders, boards, and possibly antitrust or industry regulators will be required. The Agreement should condition closing on receipt of these approvals and address remedies if approvals are denied.
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