Emerson Electric completed the merger of its software units with Aspen Technology on 5/16/2022 for cash and stock. The combined company took the same name and ticker symbol as the old Aspen Technology.
The SEC filing for this merger can be found through the SEC EDGAR web site at:
https://www.sec.gov/Archives/edgar/data/0001897982/000114036122014608/ny20001355x15_s4a.htm
This merger is a cash-plus-stock reorganization. All the information below is from the information available from the forms S-4/A. Be aware that this document explicitly states that all tax consequences are not knowable for all shareholders. Depending on certain circumstances, the cash received may be treated as a dividend. This treatment is unusual for small retail holders of the involved companies.
The price used to calculate the value of stock received was 164.89 which was the opening price of the combined company on 5/16/2022. The exchange ratio was 0.42 shares of new Aspen for each share of old Aspen.
Important Notes:
The tax status of this merger is subject to change if the IRS challenges the company interpretation of the tax code as it relates to this merger or if the analysis of the conditions mentioned in form S-4/A requires a change. It may be necessary to change the entries for this merger at a later date.
In Merger with cash transactions, realized capital gains and the cost basis of the new shares have a component dependent on the price per share chosen in the entry screens. In our experience brokers tend to use the price per share published by the companies on their websites in their guidance to shareholders. If the companies publish guidance with a share price, we use that share price in our instructions to minimize possible differences between the accounting records and broker information. In cases where no guidance is available, we will choose the lower of the opening or closing price on the effective date. Either of these prices is acceptable to the IRS and by choosing the lower price some realized capital gains will be deferred to a later date. However, there is always the chance the price we choose will not be the price chosen by your broker. The gain from the merger and cost basis of the new shares recorded in your accounting records will then differ from your broker information. Because of the lack of detail in the tax code, both our choice and your broker’s choice would be reasonable estimates of market value for the shares received. Your records are NOT incorrect because they differ from your broker. Tax return forms do have specific areas to report these usually small differences. Our tax printer software handles these adjustment entries automatically in the normal operation of the software.
Instructions for myICLUB Users.
Because the new company took on the name and the ticker symbol of Aspen Technology after the merger, this transaction will require 2 entries. First the merger with cash and then a simple merger to get back to the Aspen Technology name and ticker symbol.
Use the Merger with cash transaction.
Step 1
Date – 5/16/2022
Merging Company – AZPN (Aspen Technology)
Step 2
The Name Change Merger
Use the regular Merger transaction.
Step 1
Step 2
Save this merger and you are done.
Using two transactions in this manner will have any gain from the merger coming from Aspen Technology and any gain/loss reported on the sale of any fractional share also from Aspen Technology.
