What is the primary objective of a reverse merger?

The primary objective of a reverse merger is to go public without undergoing the traditional initial public offering (IPO) process. In a reverse merger, a private company acquires a publicly traded shell company, allowing the private entity to gain access to the public market more quickly and with potentially less regulatory scrutiny than a standard IPO would require. This process not only facilitates the private company’s entry into public markets but also provides an opportunity for it to raise capital and enhance its profile among investors.

The other options do not capture the essence of what a reverse merger is meant to achieve. While minimizing tax liabilities and maintaining private ownership might be considerations in certain strategic decisions, they are not the core purpose of a reverse merger. Selling off assets also does not align with the objectives of this transaction structure, as reverse mergers are concerned with combining companies rather than divesting parts of a business.