NXP completed its merger with Freescale on 12/7/15 for cash and NXP stock.
The SEC filing for this merger (F-4/A filing dated 5/29/15) was found in the Investor Relations area of the NXP web site.
This merger is a cash plus stock reorganization, which are becoming more and more frequent in recent years. For tax purposes this is treated as a sale of Freescale and some of the proceeds used to purchase NXP. All the information below is from the information available from the F-4/A filed with the SEC. The multi-step entry for this transaction is for Club Accounting 3 users. Instructions for Myiclub.com users are at the end of this document.
1. Sell Transaction
The total merger consideration is $36.6186 per Freescale share. This is $6.25 in cash and $30.3686 in NXP shares (.3521 x 86.25). The closing price of NXP on the merger completion date was $86.25. Your broker may use a different price. This price was chosen to postpone some of the gain until NXP shares are sold. Calculate the total value received for your Freescale shares by multiplying 36.6186 by the total shares of Freescale owned.
Total Proceeds = [36.6186 x (# of Freescale shares owned)] – (Reorganization fee).
Use the Suspense account to receive the sale proceeds.
Date this transaction 12/7/2015
2. Transfer Cash Received
Transfer from the Suspense account to the Broker account (or bank if appropriate), all cash received from this transaction. This will be the sum of the $6.25 per Freescale share. If your Suspense account balance was zero when you entered the sell transaction above, then the balance after transferring the cash received will be the total purchase price of the NXP shares you received in this merger.
3. Buy Transaction
Enter a buy transaction for the number of shares you are entitled to receive in this merger. This will be .3521 x (# of Freescale shares owned). For example if you owned 100 Freescale shares then enter 35.21 shares purchased (.3521 x 100).
Date the transaction 12/7/2015. The total purchase price will be the amount remaining in the Suspense account, if the Suspense balance was zero when this process was started. The amount should be (30.3686 x # of Freescale shares owned. For example, if you owned 100 Freescale shares, then the total purchase cost would be 3036.86
Choose the Suspense account as the source of finds for the purchase.
Save the buy transaction.
4. Fractional Share Sale
The fractional shares received in this merger will likely be sold by your broker.
Enter a Sell transaction for the fractional shares dated 12/8/2015. The share amount will be the NON-whole part of the shares bought in the buy transaction above. For example if you owned 100 Freescale shares then you entered 35.21 shares purchased. You would sell .21shares in this Sell transaction.
The total proceeds will be the cash-in-lieu amount listed on your broker statement.
For Myiclub.com Users
Use the Merger with cash transaction link.
Date – 12/7/2015
Merging Company – FSL (Freescale)
Number of daughter companies – 1
Choose the Transaction is fully taxable radio button
Cash per share received – 6.25
Exchange ratio of new to old shares – .3521
Price per share of new shares on merger date – 86.25
Reorganization fee – check your broker statement for this amount
Symbol of new company – NXPI
Cash received – see broker statement for cash-in-lieu received.
Account – choose the account to receive the cash from this transaction
The remaining fields of this transaction should be automatically populated as you fill in the merger data. The price per share of NXPI shares was chosen to limit the gain from this merger. Your broker may have chosen a different price. If you want to match your broker (not required but many clubs find this desirable) ask your broker what price they used for NXPI in this transaction.