A reverse triangular merger is a form of merger used when the acquired corporation has licenses, leases, or other assets that cannot conveniently be transferred to the acquiring corporation.  In a reverse triangular merger, the acquiring corporation forms a subsidiary corporation which it merges into the acquired corporation with the latter being the surviving entity.  Here, CVS acquired Longs Drugs in such a merger.  This decision holds that there is no reason to disregard the corporate formalities of the merger.  Longs continue to exist as a CVS subsidiary and still owns the property on which its drugstore is located, so the merger did not trigger a clause in the contract by which Longs acquired the property which required it to offer the seller a right of first refusal on any later sale or transfer of the property.  Sale or transfer of Longs’ stock was not a sale or transfer of the assets Longs owned, such as the disputed property.

California Court of Appeal, Third District (Blease, Acting P.J.); September 25, 2018; 27 Cal. App. 5th 598