Explain the consequences of wrongly applying the process

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A student has been presented with the following fact pattern. A Ltd and B Ltd combine by creating C Ltd which acquires all the shares in A Ltd and B Ltd and issues its own shares in exchange. The student knows it is important to identify an acquirer in a business combination. However, they do not understand why or the consequences of wrongly applying that process. They ask you for an explanation.

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Question 1: Explain to the student why it is important and the consequences of wrongly applying the process.

Reference no: EM132553790

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