Form S-4

A registration statement for exchange offers and M&A

Author: Christopher Haynes
Christopher Haynes
Christopher Haynes
Asset Management | Investment Banking

Chris currently works as an investment associate with Ascension Ventures, a strategic healthcare venture fund that invests on behalf of thirteen of the nation's leading health systems with $88 billion in combined operating revenue. Previously, Chris served as an investment analyst with New Holland Capital, a hedge fund-of-funds asset management firm with $20 billion under management, and as an investment banking analyst in SunTrust Robinson Humphrey's Financial Sponsor Group.

Chris graduated Magna Cum Laude from the University of Florida with a Bachelor of Arts in Economics and earned a Master of Finance (MSF) from the Olin School of Business at Washington University in St. Louis.

Reviewed By: David Bickerton
David Bickerton
David Bickerton
Asset Management | Financial Analysis

Previously a Portfolio Manager for MDH Investment Management, David has been with the firm for nearly a decade, serving as President since 2015. He has extensive experience in wealth management, investments and portfolio management.

David holds a BS from Miami University in Finance.

Last Updated:February 16, 2024

What Is SEC Form S-4?

Form S-4 is the registration statement filed to SEC (the securities and exchange commission)for exchange offers and M&A. The SEC Form S-4 is also known as the Registration Statement under the Securities Exchange Act of 1933. 

Publicly traded companies must file Form S-4 with the Securities and Exchange Commission (SEC) for acquisitions, mergers, or stock exchange offers. In addition, these companies are legally required to register any material information related to a merger or acquisition.

Mergers happen when companies want to:

  • Expand
  • Move into new segments
  • Unite efforts
  • Gain higher profits and revenues to maximize stakeholder value

In addition, companies undergoing an exchange offer, where securities are offered in place of cash, also file this form with the SEC.

On the completion of a merger, the new shares are distributed among the existing shareholders of both the merging companies. 

In bankruptcy cases, an exchange offer usually happens when a firm or financial entity exchanges its securities for similar ones with less strict terms.

Companies considering a hostile takeover of another company must file this form in the interests of public disclosure, as investors assume that stock prices will trade at a premium.

The SEC requires that Form S-4 contain material contracts, transaction terms, risk factors, ratios, and pro forma financial information acquired by the company.

Key Takeaways

  • SEC Form S-4 must be filed by publicly traded companies for acquisitions, mergers, or stock exchange offers. It ensures the disclosure of material information related to such transactions.
  • Form S-4 is required for mergers where companies aim to expand, gain profits, or enter new segments. It's also necessary for exchange offers where securities are offered instead of cash.
  • After a merger, new shares are distributed to existing shareholders of both merging companies. Exchange offers are common in bankruptcy cases, allowing firms to exchange securities with less stringent terms.
  • Companies planning hostile takeovers must file it for public disclosure, impacting stock prices as investors anticipate trading at a premium. The form contains material contracts, transaction terms, risk factors, ratios, and financial data.

When and Why Should One File a Form S-4?

When a company plans to merge, takeover, or exchange securities, it must file this form with the United States Securities and Exchange Commission (SEC). 

It is considered a disclosure from the company’s side, and a chance is given to investors to act on the announcement.

Companies must fill out the form: 

  • If any form of merger occurs
  • For exchange offers of securities

In case of a merger, the applicable state law does not require the consent of all the company’s security holders or the solicitation of votes.

SEC Form S-4 makes companies disclose takeover, merger, or exchange offer decisions. Investors acting appropriately on the information in a merger announcement have a huge earning opportunity. In addition, the form lets the market account for the merger through security pricing. 

The share prices of the acquirer and target are decided based on the investors’ confidence in the merger.

How is Form S-4 Used?

All mergers require this form. For example, here are the five typical types of mergers:

  • Conglomerate mergers: These mergers involve two unrelated companies, in terms of business, that join to expand their current markets.
  • Horizontal Mergers: The goal of these mergers is to expand the company's market share, as the merging parties are competitors within the same industry. 
  • Vertical Mergers: Vertical mergers happen due to supply chain reasons, as the merger reduces the costs of the final product. Here, the companies are related, as one company is a supplier to the other.
  • Market Extension Mergers: All parties in this type of merger aim to expand into new markets, as the companies that are merging may have similar products operating in different markets.
  • Congeneric Mergers: The companies occupy the same market, and the merger creates economies of scale or efficiencies because the companies may use the same technology, raw materials, and R&D processes.
  • Hostile Takeovers: Companies considering a hostile takeover of another company must file form S-4 to provide public notice so investors can use this information to account for possible changes in the stock's value. Investors realize that company stock prices generally trade at a premium during a merger or takeover.

For an M&A transaction, the SEC requires that Form S-4 contain material information regarding:

  1. Terms of the transaction 
  2. Risk factors 
  3. The ratio of earnings to fixed charges and other ratios 
  4. Pro forma financial information 
  5. Material contracts between companies 
  6. Additional information required for re-offering by persons and parties deemed to be underwriters and interests of named experts and counsel

Form S-4 Review Period

If the form is appropriately filled by the companies planning for a merger and sent for review, the SEC provides the comments within 27 business days of filling.

Once a comment is passed, subsequent amendments may be required. The comments are generally passed within ten business days.

Let us take a look at an illustration of this form:

Frontier Airlines has filed a Registration Statement on Form S-4 with the SEC in connection with the proposed transaction to merge with Spirit Airlines. They also filed a Definitive Information Statement/Prospectus of Frontier Airlines and a Definitive Proxy Statement of Spirit Airlines. 

The merger is between Frontier Airlines and Spirit Airlines.

This filing was declared effective on March 11, 2022, and the prospectus/proxy statement was first shared with Spirit Airlines stockholders on March 11, 2022.  Frontier Airlines and Spirit Airlines also plan to file other relevant documents regarding the proposed transaction with the SEC.

In conclusion, the SEC Form S-4 is a regulatory requirement that every company must file if planning for a merger, takeover, or securities exchange.

Material disclosure through this form benefits investors waiting for potential benefits from the announcement.  Such exposure also allows the existing shareholders to decide upon their association with the company after the merger announcement.

Form S-4 FAQs

Researched and authored by Rohan Kumar Singh | LinkedIn

Reviewed and edited by James Fazeli-Sinaki | LinkedIn

Uploaded and published by Omair Reza Laskar | LinkedIn

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