The merger agreement for Oracle Corp.’s acquisition of Siebel Systems Inc. has been filed and surprisingly, the parties will employ a “horizontal double dummy” format to bring the transaction within the auspices of Internal Revenue Code �351.
This will enable those Siebel shareholders who elect to receive stock of the holding company (formed to implement the double dummy) to receive such stock tax-free. However, the agreement also indicates that if less than 6 percent of the stock of Siebel is sought to be exchanged for holding company stock (no more than 30 percent, in any event, can be so exchanged), the double dummy structure will be scrapped and the parties will revert to the more conventional reverse triangular merger format.
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