De Facto Merger

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With the de facto merger doctrine, some courts have held that the substance of a combination attempt determines whether statutory protections should be made available to shareholders. Thus, where an asset acquisition leads to the same result as a statutory merger, these jurisdictions demand that shareholders are given the same rights as in the statutory merger. See Farris v. Glen Alden Corp., 143 A.2d 25 (Pa. 1958).

Most courts, particularly in Delaware, have rejected the de facto merger doctrine and refuse to imply merger-type protection in these cases. See Hariton v. Arco Electronics, Inc., 182 A.2d 22 (Del. Ch. 1962), aff'd, 188 A.2d 123 (Del. 1963) (relying on the independent legal significance doctrine).