Squeeze-out

A squeeze-out[1] or squeezeout,[2] sometimes synonymous with freeze-out,[2] is the compulsory sale of the shares of minority shareholders of a joint-stock company for which they receive a fair cash compensation.

This technique allows one or more shareholders who collectively hold a majority of shares in a corporation to gain ownership of remaining shares in that corporation. The majority shareholders incorporate a second corporation, which initiates a merger with the original corporation. The shareholders using this technique are then in a position to dictate the plan of merger. They force the minority stockholders in the original corporation to accept a cash payment for their shares, effectively "freezing them out" of the resulting company.

  1. ^ "Squeeze-out". Wex. Cornell Law School. Retrieved 20 December 2017.
  2. ^ a b "squeeze out". Merriam-Webster, Inc. Retrieved 20 December 2017.