At times, an acquisition tries to preclude shareholder voting or appraisal rights. For example, Delaware and some states provide appraisal rights for merger, but do not allow appraisal rights for sale of substantially all of the assets.
An acquisition is structured as an asset sale with the acquiriing corporation also assuming the liabilities and issuing its shares to the selling coropration which will dissolve and then distribute the shares to its shareholders. If viewed as a sale of assets in Delaware, then the selling corporation's shareholder will not have appraisal rights available in the event valuation is challenged (see Hariton v. Arco Electronics). As a result, shareholders of the selling corporation may aruge that the transaction was more like a merger, that is a "defacto merger." They will ask a court to look at the transaction and determine if the substance of the transaction, as opposed to its form, is in effect a merger with the right of appraisal for the shareholders. Given that appraisal was to protect shareholders, when the combination means the corporation loses its essential nature and alters the original fundamental relationships of the shareholders then appraisal rights may be found (see Farris v. Glen Alden Corporation).
This potential judicial review protects shareholders' statutory rights by not allowing clever attorneys to structure transactions in a way that technically avoids a merger. Thus, the court looks at the intent of the legislature in protecting shareholders and will not allow the use of one statutory provision (that is, sale of assets) to undercut another designed to protect shareholders (that is, merger provisions). Other states, including Delaware, view the statutory scheme differently.
Delaware, for instance, rejects the defacto merger doctrine so long as the statute is complied with. It is irrelevant a transaction undermines the protections of another statutory provision as long as a transaction technically complies with that statutory provision. For example, a sale of assets that looks like a merger need only comply with the statutory provisions dealing with the sale of assets, even if the substance of the transaction looks like a merger.