Shareholders of parent in reverse triangular merger lack appraisal rights

By Anne Sherry, J.D. The Delaware Court of Chancery held that the state’s corporation law does not provide appraisal rights to shareholders of the parent of a party to a merger, as the parent is not a “constituent corporation.” Furthermore, shareholders of Dr Pepper Snapple Group, which is creating a subsidiary to merge into Keurig Green Mountain in a reverse triangular merger, are retaining their shares in connection with the transaction; the appraisal statute contemplates that the shares will be relinquished (City of North Miami Beach General Employees’ Retirement Plan v. Dr Pepper Snapple Group, Inc., June 1, 2018, Bouchard, A.). Merger and proposals. Through the reverse triangular merger, a merger subsidiary of Dr Pepper will combine with the parent of Keurig, making Keurig an indirect wholly owned subsidiary of Dr Pepper. Dr Pepper stockholders will receive a special cash dividend of $103.75 per share and will retain their shares, which will account…

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