The surviving corporation is the company that exists or remains in control with the rights and responsibilities of the firms following a business merger or takeover. The surviving company is often one of the original firms involved the transaction but may be a new company formed by the combination sometimes referred to as the merger sub. For example, Glaxo Wellcome, subsequently GlaxoSmithKline, was the surviving entity the merger between Glaxo and the Wellcome Trust.
Although a merged corporation ceases to exist, pending legal proceedings at the time of the merger may proceed against the surviving corporation. Similarly, if a merging corporation has filed suit against another party before the merger occurs, the suit may be continued after the merger in the name of either the merged corporation or the survivor.
Surviving Corporation Example
The following text is taken from the Form PREM14A Filing with the SEC made by Adesto Technologies Corporation (IOTS) on March 16, 2020 in relation to the proposed takeover by Dialog Semiconductor PLC
SECTION 1. DESCRIPTION OF TRANSACTION
1.1 Merger of Merger Sub into the Company.
Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time, Merger Sub shall be merged with and into the Company, and the separate existence of Merger Sub shall cease. The Company will continue as the surviving corporation in the Merger (the “Surviving Corporation“).
The document then goes on to discuss the fate of the merger sub and how this will be referenced as the surviving corporation
The Merger
Upon the terms and subject to the conditions of the Merger Agreement, and in accordance with the Delaware General Corporation Law (the “DGCL”), if the Merger is completed, Merger Sub will merge with and into Adesto, and Adesto will continue as the surviving corporation and wholly owned direct or indirect subsidiary of Dialog (the “Surviving Corporation“). As a result of the Merger, we will cease to be a publicly traded company, all shares of Adesto Common Stock outstanding immediately prior to the effective time of the Merger (the “Effective Time”) will be canceled and converted into the right to receive $12.55 in cash, without interest (the “Merger Consideration“) (except for any (i) shares held, directly or indirectly, by any wholly owned subsidiary of Adesto, (ii) shares held by Adesto (or held in Adesto’s treasury) or held, directly or indirectly, by Dialog, Merger Sub or any other wholly owned subsidiary of Dialog and (iii) shares owned by stockholders who are entitled to and who properly exercise appraisal rights under the DGCL (collectively, the “Excluded Shares”)), and you will no longer own any shares of the capital stock of the Surviving Corporation, as described below under the section captioned “The Merger Agreement“.
In this document, the surviving corporation is named and identified. DGCL is the most common set of rules followed as the majority of public firms are incorporated there and also serves as a guide to other states.
