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 nontaxable bids should be more popular by far.

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Whether a merger offer is taxable or not depends on the specific terms and structure of the deal, not just on whether payment is made in cash or stock. Both cash and stock transactions can be structured in ways that are taxable or nontaxable. The popularity of nontaxable bids over taxable ones depends on various factors, including the specific tax implications for both the acquiring and target companies, as well as their shareholders.

A Taxable Merger Offer Is One Where the Acquiring Company