A reverse merger (also known as a reverse takeover or reverse IPO) is a way for private companies to go public, typically through a simpler, shorter, and less expensive process. A conventional initial public offering (IPO) is more complicated and expensive, as private companies hire an investment bank to underwrite and issue shares of the soon-to be public company.
When acquiring company is weaker or smaller than the one being gobbled up, this is termed a reverse merger. Typically, reverse mergers take place through a parent company merging into a subsidiary.
The answer to this question will vary in a taxation interview – here, it will be regarding how losses will be set off.
