Form S-4

Updated on May 22, 2024
Article bySourav Sinha
Edited byAaron Crowe
Reviewed byDheeraj Vaidya, CFA, FRM

What Is Form S-4?

Form S-4 is a registration statement that companies must submit to the Securities and Exchange Commission before planning a merger, takeover, or exchange offer. It is usually believed that the target company’s share price increases after the merger announcement and the acquirer’s share price falls. So, investors willing to benefit from this keep a close eye on the Form S-4 submission.

Form S4

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Source: Form S-4 (wallstreetmojo.com)

It is a regulatory requirement that every company must file if planning for a merger, takeover, or securities exchange. This disclosure is beneficial for investors waiting to earn from the announcement. After the merger announcement, such exposure also gives existing shareholders a chance to decide whether they want to be associated with the company.

Key Takeaways

  • Form S-4 is a registration statement required by the Securities and Exchange Commission (SEC) for companies planning a merger, takeover, or exchange offer. 
  • The purpose of Form S-4 is to provide transparency and disclosure regarding merger, takeover, or exchange offer decisions. It allows the market to react to the announcement, and investor confidence in the merger influences the share prices of the acquirer and target companies.
  • Investor Opportunities: Investors closely following Form S-4 filings can benefit from the market reaction to merger announcements. 

Form S-4 Explained

Form S4 sample

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Source:https://www.sec.gov/

Form S-4 is a type of registration statement that is required to be filed with the US Securities and Exchange Commission (SEC) , under the Securities Act of 1933. The SEC Form S-4 is used by all companies who are involved in the process of acquisition, merger, any kind of exchange offer or any other form of business combination.

It is a source of information to the SEC and also for the shareholders of the companies regarding the transaction process and the impact that the collaborations have on the participating companies.

It is an important filing under the regulation which ensures proper communication and transparency to the shareholders and SEC. Form S-4 instructions protect investor interests by helping in clear and correct disclosure of important information and also the securities offered in the process.

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Purpose

The purpose of SEC Form S-4 is quite significant in the financial market. It is used to register the securities or financial instruments that will be issued in relation to the business combination.

Form S-4 makes companies disclose merger, takeover, or exchange offer decisions. Thus, it can also be called a disclosure document that provides every details to the shareholders and the SEC about the financial transaction. The security transaction details include the securities receives, the financial reports of the companies who participated in the transaction, the risks involved, management analysis, the impact of the business combination in the financial market and other relevant data among the Form S-4 checklist that can help in making informed investment decisions.

Investors acting properly in a merger announcement have a huge earning opportunity because it offers the details of the securities issued which the investors can use as investment avenue and earn returns. So, this form lets the market work on the merger announcement, and the share prices of the acquirer and target are decided based on the investors’ confidence in the merger.

Example

Let us understand the concept with the help of an example as given below:

On 15 April 2020, VectoIQ Acquisition Corp. filed Form S-4 to the Securities and Exchange Commission. The merger is between VectoIQ Acquisition Corp. and Nikola Corporation. The form got accepted on the same day.

When To File?

It must be filed with the U.S. Securities and Exchange Commission when a company plans to merge, takeover, or exchange securities. Form S-4 instructions are considered a disclosure from the company’s side, and a chance is given to investors to act on the announcement.

Requirements

One must fill out the form: –

  • In the case of a merger, the applicable state law does not require the solicitation of the votes or consent of all of the company’s security holders.
  • Any form of merger.
  • For exchange offers of securities as well.

Review Period

It is appropriately filled by the companies planning for a merger and sent for review. It is the responsibility of the SEC to review the registration statement as per the Form S-4 checklist and verify whether it complies with the rules and regulations of security laws. Once the form is submitted for review, it is generally seen that comments are provided within 27 business days of filling.

The SEC has the right to request for some additional information if the information submitted is not satisfactory. The filing company should address these requirements to take the process forward. Once a comment is passed, it is seen that subsequent amendments are required. The comments are generally passed within ten business days. However, once the SEC is satisfied with the disclosures of the Form S-4 checklist it declares that the registration is effective and complete.

Frequently Asked Questions (FAQs)

1. What are the benefits of filing form S-4?

Filing Form S-4 provides several benefits. It allows companies to disclose important information regarding mergers, takeovers, or exchange offers, enabling investors to make informed decisions. It also helps establish transparency and investor confidence in the market. Additionally, the form provides an opportunity for companies to attract potential investors and potentially increase their shareholder base.

2. Is it easy to update Form S-4 after its initial filing?

Updating Form S-4 after its initial filing can be a complex process. Any updates or amendments to the form must be carefully reviewed and approved by the Securities and Exchange Commission (SEC). Companies are required to provide accurate and up-to-date information in a timely manner, ensuring that investors have the most recent and relevant details regarding the merger, takeover, or exchange offer.

3. What is the difference between Form S-3 and Form S-4?

The main difference between Form S-3 and Form S-4 lies in their eligibility criteria. Form S-3 is designed for companies that meet certain eligibility requirements, such as having a sufficient public float and a history of timely SEC filings. It is used for registering securities offerings by well-established and seasoned companies. On the other hand, Form S-4 is used specifically for mergers, takeovers, or exchange offers, requiring companies to disclose relevant information related to these transactions.

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This article is a guide to what is Form S-4. We explain when to file it and its requirements along with purpose, example, and review period. You may also learn more about financing from the following articles: –