Ha Ltd. and Hee Ltd. exchanged shares in a business combination. After the share exchange, each company held the same number of voting shares. Which of the following statements is true?

A) The company with the highest net assets is considered the acquirer.
B) The companies must ask the courts to decide which company is the acquirer.
C) A number of factors must be considered to determine which company is the acquirer.
D) There is no acquirer as this is not a proper business combination.

Question

Alexis Alonso · Accepted Answer

Final Answer : C, Explanation :  The determination of the acquirer in a business combination involves a consideration of multiple factors, including the legal form of the transaction, the relative size of the companies, the composition of the board of directors and management team, and other relevant factors. Therefore, option C is the correct answer. Option A is not always true as the net assets alone are not the sole determining factor. Option B is not necessary as the determination does not need to involve courts. Option D is not true as the exchange of shares is a valid form of business combination.

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