SEC Form S-4 Explained: M&A Filing Requirements and Purpose

What Is SEC Form S-4?

SEC Form S-4 is filed by publicly traded companies with the Securities and Exchange Commission (SEC) to register material information related to mergers, acquisitions, or exchange offers where securities are offered instead of cash.

The form is important for ensuring legal compliance in these transactions and must include details such as the company's registered name, state of incorporation, transaction terms, risk factors, and pro-forma financial statements. SEC Form S-4 is also required in cases of stock exchange offers and can be central to disclosures in hostile takeovers.

How SEC Form S-4 Works

SEC Form S-4, a registration statement under the Securities Exchange Act of 1933, is required for companies participating in mergers, acquisitions, or stock exchanges. The SEC reviews it to confirm the transaction's legality.

For mergers and acquisitions (M&A), the SEC mandates that Form S-4 include details such as:

• Terms of the transaction
• Risk factors
• Ratio of earnings to fixed charges and other ratios
• pro-forma financial information
• Material contracts with the company being acquired
• Additional information required for reoffering by persons and parties deemed to be underwriters
• Interests of named experts and counsel

When completing SEC Form S-4, a company must include its registered name, jurisidiction of incorporation, classification code number, employer identification number (EIN), address and names of the principal executive officers, and the name and details of the service agent. Other details include the date of the proposed sale and the company's filer status.

Important Details for Filing SEC Form S-4

Every merger needs an SEC Form S-4. Here are five common merger types:

• Conglomerate Mergers: These mergers involve two unrelated companies in terms of business who join to expand their current markets.
• Congeneric Mergers: In this type of merger, the companies occupy the same market. The merger creates efficiencies or economies of scale because the companies may use the same raw materials, technology, and research and development (R&D) processes.
• Market Extension Mergers: The companies that are merging may have similar products operating in different markets. The goal for all parties is to expand into new markets.
• Horizontal Mergers: The merging parties are competitors within the same industry. The goal of the merger is to expand market share.
• Vertical Mergers: Vertical mergers occur for supply chain reasons. One company is typically a supplier to the other, and the merger reduces the costs of the final product.

In hostile takeovers, stock prices often trade at a premium. To ensure public disclosure, companies attempting such takeovers must file Form S-4.

Real-World Example: Marriott's SEC Form S-4

Marriott International (MAR) filed a Form S-4 on Dec. 22, 2015. It described the proposed combination with Starwood Hotel & Resorts Worldwide. The 192-page document, excluding appendices, contains complete details of the proposed transaction, which eventually closed on Sept. 23, 2016.

In addition to the pro-forma figures and valuation numbers of the transaction, the most interesting sections of the filing for investors are the reasons given by each company for the combination, the timeline of the deal, and how and when the deal came together.

The Bottom Line

Public companies in the United States must submit SEC Form S-5 to comply with regulations whenever they engage in mergers, acquisitions, or stock exchange offers.

The form registers all material information about these transactions with the SEC, as required under the Securities Exchange Act of 1933, ensuring transparency and legality. It is also essential for disclosures in hostile takeovers, helping maintain investor trust and regulatory compliance during significant corporate changes.