# Reverse Merger

*Corporate Finance & M&A — Finicade finance glossary*

A reverse merger takes a private company public by merging it into an existing listed shell. It's faster and cheaper than an IPO and skips much of the underwriting scrutiny — which is precisely why the route has a poor reputation, having been used for a wave of frauds. It also leaves the company with whatever history and liabilities the shell carried.

**Also known as:** reverse takeover, RTO, backdoor listing

**Related terms:** [SPAC](https://finicade.com/glossary/spac), [IPO (Initial Public Offering)](https://finicade.com/glossary/ipo), [Delisting](https://finicade.com/glossary/delisting), [Direct Listing](https://finicade.com/glossary/direct-listing), [Due Diligence](https://finicade.com/glossary/due-diligence)

Source: https://finicade.com/glossary/reverse-merger