Question

Identify the type of acquisition in which the purchasing company becomes a subsidiary of the purchased company.

• A. Back flip acquisition
• B. Reverse acquisition
• C. Hostile acquisition
• D. Friendly acquisition

Hint:

In reverse acquisition, the purchasing company becomes a subsidiary of the purchased company.

Answer 1

The Correct Option is B

A reverse acquisition occurs when a smaller company acquires a larger one, with the result being that the purchasing company becomes a subsidiary of the acquired company.