A taxable merger offer is one where the acquiring company offers to purchase the target company with cash. However, the same deal is not taxable if the merger is paid by exchanging stocks. Such non- taxable bids should be by far more popular.

Question

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The statement is incorrect. A stock-for-stock merger may still result in taxable consequences depending on the details of the transaction. Additionally, there may be reasons why a company prefers a taxable merger offer, such as the ability to use tax deductions from the transaction. Therefore, the popularity of non-taxable bids versus taxable bids may vary depending on the specific circumstances of the companies involved.

A Taxable Merger Offer Is One Where the Acquiring Company