MERGER AND CONSOLIDATION

Iowa Code tit. XII, ch. 499, subch. II

in effect

Iowa Code § 499.61 Definitions.

499.61. Definitions. When used in this subchapter, unless the context otherwise requires: 1. “Consolidation” means the uniting of two or more cooperative associations into one cooperative association, in such manner that a new cooperative association is formed, and the new cooperative association absorbs the others, which cease to exist as separate entities. 2. “Merger” means the uniting of two or more cooperative associations into one cooperative association, in such manner that one of the merging associations retains its corporate existence and absorbs the others, which cease to exist as corporate entities. “Merger” does not include the acquisition, by purchase or otherwise, of the assets of one cooperative association by another, unless the acquisition only becomes effective by the filing of articles of merger by the associations and the issuance of a certificate of merger pursuant to sections 499.67 and 499.68. 3. “New association” is the cooperative association resulting from the consolidation of two or more cooperative associations. 4. “Qualified corporation” means a corporation organized and existing under chapter 490, which is structured and operated on a cooperative basis pursuant to 26 U.S.C. §1381(a)(2) and which meets the definitional requirements of an association as provided in 12 U.S.C. §1141j(a) or 7 U.S.C. §291. 5. “Qualified merger” means the uniting of one or more cooperative associations with one or more qualified corporations to form one cooperative association or qualified corporation, in such a manner that one entity participating in the merger continues to exist and absorbs the others, with the others ceasing to exist as cooperative or corporate entities. 6. “Qualified survivor” means the cooperative association or qualified corporation which continues to exist after a qualified merger. 7. “Surviving association” is the cooperative association resulting from the merger of two or more cooperative associations. [C71, 73, 75, 77, 79, 81, §499.61] 87 Acts, ch 88, §4; 97 Acts, ch 17, §7; 2014 Acts, ch 1026, §143

Iowa Code § 499.62 Merger.

499.62. Merger. 1. Any two or more cooperative associations may merge into one cooperative association in the manner provided in this section. 2. The board of directors of each cooperative association shall, by resolution adopted by a majority vote of all members of each board, approve a plan of merger which shall set forth: a. The names of the cooperative associations proposing to merge and the name of the surviving association. b. The terms and conditions of the proposed merger. c. A statement of any changes in the articles of incorporation of the surviving association. d. Other provisions deemed necessary or desirable. [C71, 73, 75, 77, 79, 81, §499.62] 2012 Acts, ch 1023, §93 Merger with other business entities; §501A.1101 – 501A.1103

Iowa Code § 499.63 Consolidation.

499.63. Consolidation. 1. Any two or more cooperative associations may be consolidated into a new cooperative association in the manner provided in this section. 2. The board of directors of each cooperative association shall, by resolution adopted by a majority vote of all members of each board, approve a plan of consolidation setting forth: a. The names of the cooperative associations proposing to consolidate and the name of the new association. b. The terms and conditions of the proposed consolidation. c. With respect to the new association, all of the statements required to be set forth in articles of incorporation for cooperative associations. d. Other provisions deemed necessary or desirable. [C71, 73, 75, 77, 79, 81, §499.63] 2012 Acts, ch 1023, §94 Consolidation with other business entities; §501A.1101

Iowa Code § 499.64 Vote of members.

499.64. Vote of members. 1. The board of directors of a cooperative association, upon recommending a plan of merger or consolidation be approved by the members, shall, by motion or resolution, direct that the plan be submitted to a vote at a meeting of members, which may be either an annual or special meeting. The board of directors may condition its recommendation and submission of a plan of merger or consolidation to the members for approval under this section on any basis. Written notice shall be given not less than twenty days prior to the meeting, either personally or by mail to each voting member and shareholder of record. The notice shall state the time, place, and purpose of the meeting, and a summary of the plan of merger or consolidation shall be included in or enclosed with the notice. 2. The board of directors may hold the meeting solely by means of remote communication in accordance with section 499.27A and in that case the notice shall describe how members may participate in the meeting. 3. At the meeting, a vote of the members who are entitled to vote in the affairs of the association shall be taken on the proposed plan of merger or consolidation. The plan of merger or consolidation shall be approved as follows: a. Except as provided in paragraph “b”, the proposed plan of merger or consolidation must be approved by a two-thirds vote of the members in which vote a majority of all voting members participate. b. (1) If the cooperative association’s articles of incorporation require approval by more than two-thirds of its members in which vote a majority of all voting members participate, the proposed plan of merger or consolidation must be approved by the greater number as provided in the articles of incorporation. (2) If the board of directors adopts additional conditions for the approval of the plan of merger or consolidation as provided in subsection 1, the additional conditions must be satisfied in order for the plan of merger or consolidation to be approved. [C71, 73, 75, 77, 79, 81, §499.64] 97 Acts, ch 17, §8; 2008 Acts, ch 1141, §6; 2011 Acts, ch 23, §6; 2012 Acts, ch 1023, §71, 72; 2021 Acts, ch 165, §238, 248

Iowa Code § 499.65 Objection of members — purchase of shares upon demand.

499.65. Objection of members — purchase of shares upon demand. 1. If a voting member or voting shareholder of a cooperative association which is a party to a merger or consolidation files with the cooperative association, prior to or at the meeting of members at which the plan is submitted to a vote, a written objection to the plan of merger or consolidation, and votes in opposition to the plan, and the member or shareholder, within twenty days after the merger or consolidation is approved by the other members, makes written demand on the surviving or new association for payment of the fair value of that member’s or shareholder’s interest as of the day prior to the date on which the vote was taken approving the merger or consolidation, the surviving or new association shall pay to the member or shareholder, upon surrender of that person’s certificate of membership or shares of stock, the fair value of that person’s interest as provided in section 499.66. A member or shareholder who fails to make demand within the twenty-day period is conclusively presumed to have consented to the merger or consolidation and is bound by its terms. 2. In the event that a dissenting member or shareholder does business with the surviving or new association before payment has been made for that person’s membership or stock, the dissenting member or shareholder is deemed to have consented to the merger or consolidation and to have waived all further rights as a dissenting member or shareholder. [C71, 73, 75, 77, 79, 81, §499.65] 86 Acts, ch 1196, §7; 92 Acts, ch 1147, §2; 2018 Acts, ch 1041, §127

Iowa Code § 499.66 Value determined.

499.66. Value determined. 1. As used in this section: a. “Dissenting member” means a voting member who votes in opposition to the plan of merger or consolidation and who makes a demand for payment of the fair value under section 499.65. b. “Old association” means the association in which the member owns or owned a membership. c. “New association” means the surviving or new association after the merger or consolidation. d. “Issue price” means the amount paid for an interest in the old association or the amount stated in a notice of allocation of patronage dividends. e. “Fair market value” means the cash price that would be paid by a willing buyer to a willing seller, neither being under any compulsion to buy or sell. 2. a. Within twenty days after the merger or consolidation is effected, the new association shall make a written offer to each dissenting member to pay a specified sum deemed by the new association to be the fair value of that dissenting member’s interest in the old association. This offer shall be accompanied by a balance sheet of the old association as of the latest available date, a profit and loss statement of the old association for the twelve-month period ending on the date of this balance sheet, and a list of the dissenting member’s interests in the old association. If the dissenting member does not agree that the sum stated in this notice represents the fair value of the member’s interest, then the member may file a written objection with the new association within twenty days after receiving this notice. A dissenting member who fails to file this objection within the twenty-day period is conclusively presumed to have consented to the fair value stated in the notice. b. If the surviving or new association receives any objections to fair values, then within ninety days after the merger or consolidation is effected, the new association shall file a petition in the Iowa district court asking for a finding and determination of the fair value of each type of equity. The action shall be prosecuted as an equitable action. c. The fair value of a dissenting member’s interest in the old association shall be determined as of the day preceding the merger or consolidation by taking the lesser of either the issue price of the dissenting member’s membership, common stock, deferred patronage dividends, and preferred stock, or the amount determined by subtracting the old association’s debts from the fair market value of the old association’s assets, dividing the remainder by the total issue price of all memberships, common stock, preferred stock, and revolving funds, and then multiplying the quotient from this equation by the total issue price of a dissenting member’s membership, common stock, preferred stock, and revolving fund interest. 3. The new association shall pay to each dissenting member in cash within sixty days after the merger or consolidation the amount paid in cash by the dissenting member for that member’s interest in the old association. The new association shall pay the remainder of each dissenting member’s fair value in ten annual equal payments. The final payment must be made not later than fifteen years after the merger or consolidation. The value of the deferred patronage dividends and preferred stock shall be considered a liability of the new association as reflected in the accounts of the new association until the value of the patronage dividends or preferred stock is paid in full to the dissenting member. A dissenting member who is a natural person who dies before receiving the fair value shall have all of the person’s fair value paid with the same priority as if the person was a member at the time of death. [C71, 73, 75, 77, 79, 81, §499.66] 86 Acts, ch 1196, §8; 87 Acts, ch 16, §1, 2; 92 Acts, ch 1147, §3; 2012 Acts, ch 1023, §157; 2014 Acts, ch 1092, §107

Iowa Code § 499.67 Articles of merger or consolidation.

499.67. Articles of merger or consolidation. 1. Upon approval, articles of merger or articles of consolidation shall be executed by each cooperative association as provided in section 499.44. The articles must include the following: a. The plan of merger or the plan of consolidation. b. As to each cooperative association, the number of individuals or cooperative associations entitled to vote. c. As to each cooperative association, the number of individuals or cooperative associations who voted for and against the plan at the meeting called for that purpose. 2. The articles of merger or articles of consolidation shall be delivered to the secretary of state for filing. 3. The secretary of state, upon the filing of articles of merger or articles of consolidation, shall issue a certificate of merger or a certificate of consolidation, and send the certificate to the surviving or new association, or to its representative. [C71, 73, 75, 77, 79, 81, §499.67] 90 Acts, ch 1164, §8, 9; 94 Acts, ch 1055, §14; 2012 Acts, ch 1023, §157

Iowa Code § 499.68 When effective — effect.

499.68. When effective — effect. A merger or consolidation shall become effective upon the date that the certificate of merger or the certificate of consolidation is issued by the secretary of state, or the effective date specified in the articles of merger or articles of consolidation, whichever is later. When a merger or consolidation has become effective: 1. The several cooperative associations which are parties to the plan of merger or consolidation shall be a single cooperative association, which, in the case of a merger, shall be that cooperative association designated in the plan of merger as the surviving association, and, in the case of consolidation, shall be that cooperative association designated in the plan of consolidation as the new association. 2. The separate existence of all cooperative associations which are parties to the plan of merger or consolidation, except the surviving or new association, shall cease. 3. The surviving or new association shall have all the rights, privileges, immunities, and powers and shall be subject to all the duties and liabilities of a cooperative association organized under the laws of this state. 4. The surviving or new association shall possess all the rights, privileges, immunities, and franchises, public as well as private, of each of the merging or consolidating cooperative associations. 5. All property, real, personal, and mixed, and all debts due on whatever account, including subscriptions to shares, and all other choses in action, and all and every other interest, of or belonging to or due to each of the cooperative associations merged or consolidated, shall be transferred to and vested in the surviving or new association without further act or deed. The title to any real estate, or any interest in real estate vested in any of the cooperative associations merged or consolidated, shall not revert or be in any way impaired by reason of the merger or consolidation. 6. A surviving or new association shall be responsible and liable for all obligations and liabilities of each of the cooperative associations merged or consolidated. 7. Any claim existing or action or proceeding pending by or against any of the cooperative associations merged or consolidated may be prosecuted as if the merger or consolidation had not taken place, or the surviving or new association may be substituted for the merged or consolidated association. Neither the rights of creditors nor any liens upon the property of any cooperative association shall be impaired by a merger or consolidation. 8. In the case of a merger, the articles of incorporation of the surviving association shall be deemed to be amended to the extent that changes in its articles of incorporation are stated in the plan of merger. In the case of a consolidation, the statements set forth in the articles of consolidation which are required or permitted to be set forth in the articles of incorporation of cooperative associations organized under the laws of the state of Iowa shall be deemed to be the original articles of incorporation of the new cooperative association. 9. The aggregate amount of the net assets of the merging or consolidating cooperative associations which was available for the payment of dividends immediately prior to the merger or consolidation, to the extent that the amount is not transferred to stated capital by the issuance of shares or otherwise, shall continue to be available for the payment of dividends by the surviving or new association. [C71, 73, 75, 77, 79, 81, §499.68] 97 Acts, ch 65, §22012 Acts, ch 1023, §95

Iowa Code § 499.69 Foreign and domestic mergers or consolidations.

499.69. Foreign and domestic mergers or consolidations. 1. One or more foreign cooperative associations and one or more domestic cooperative associations may be merged or consolidated in the following manner, if such merger or consolidation is permitted by the laws of the state under which each foreign cooperative association is organized: a. Each domestic cooperative association shall comply with the provisions of this subchapter with respect to the merger or consolidation of domestic cooperative associations, and each foreign cooperative association shall comply with the applicable provisions of the laws of the state under which it is organized. b. If the surviving or new association is to be governed by the laws of any state other than this state, it shall comply with the provisions of the laws of this state with respect to the qualifications of foreign cooperative associations if it is to transact business in this state, and in every case it shall file with the secretary of state of this state: (1) An agreement that it may be served with process in this state in any proceeding for the enforcement of any obligation of any domestic cooperative association which is a party to the merger or consolidation, and in any proceeding for the enforcement of the rights of a dissenting shareholder of any such domestic cooperative association, against the surviving or new association. (2) An irrevocable appointment of the secretary of state of this state as its agent to accept service of process in any proceeding. (3) An agreement that it will promptly pay to the dissenting shareholders of any domestic cooperative association the amount to which they are entitled under the provisions of this subchapter with respect to the rights of dissenters. 2. The effect of such merger or consolidation shall be the same as the effect of the merger or consolidation of domestic cooperative associations, if the surviving or new association is to be governed by the laws of this state. If the surviving or new association is to be governed by the laws of any other state, the effect of merger or consolidation shall be the same as in the case of the merger or consolidation of domestic cooperative associations, except as the laws of the other state otherwise provide. [C71, 73, 75, 77, 79, 81, §499.69] 2012 Acts, ch 1023, §96; 2014 Acts, ch 1026, §143

Iowa Code § 499.69A Qualified mergers.

499.69A. Qualified mergers. 1. One or more cooperative associations and one or more qualified corporations may participate in a qualified merger as provided in this section. 2. Each participating cooperative association and qualified corporation must approve a written plan of qualified merger. a. The plan shall set forth all of the following: (1) The name of each cooperative association and qualified corporation participating in the qualified merger, and the name of the qualified survivor. (2) The terms and conditions of the qualified merger. (3) The manner and basis of converting the interests, including shares or other securities, and obligations in each nonsurviving cooperative association or qualified corporation into the interests and obligations of the qualified survivor. (4) Any amendments to the articles of incorporation of the qualified survivor as are desired to be effected by the qualified merger, or a statement that no amendment is desired. (5) The date that the qualified merger becomes effective, if the date is different than the date when a certificate of merger is to be issued for a cooperative association, or if the date is different than the date when the articles of merger are filed with the secretary of state for a qualified corporation. (6) Other provisions relating to the qualified merger as are deemed necessary or desirable. b. A proposed plan for a qualified merger complying with the requirements of this section shall be approved as follows: (1) For a cooperative association which is a party to the proposed qualified merger, the cooperative association shall approve the plan as provided in this chapter. (2) For a qualified corporation which is a party to the proposed qualified merger, the qualified corporation shall approve the plan as provided in chapter 490, subchapter XI. c. After the proposed plan for the qualified merger is approved, a cooperative association or qualified corporation may abandon the merger in the manner provided in the plan, prior to the filing of the articles of merger. 3. After a proposed plan of the qualified merger is approved, the qualified survivor shall deliver articles of merger for the qualified merger to the secretary of state for filing. The articles of merger shall be executed by each cooperative association and qualified corporation which is a party to the qualified merger. The articles of merger shall set forth all of the following: a. The name of each cooperative association and qualified corporation which is a party to the qualified merger. b. The plan for the qualified merger. c. The effective date of the qualified merger, if later than the date of filing the articles of merger. d. The name of the qualified survivor. e. A statement that the plan for the qualified merger was approved by each participating cooperative association and qualified corporation in a manner required for the cooperative association and qualified corporation as provided in this section. 4. For a surviving cooperative association, a qualified merger becomes effective upon the filing of the articles of merger with the secretary of state and the issuance of a certificate of merger pursuant to section 499.68 or the date stated in the articles of merger, whichever is later. For a surviving qualified corporation, a qualified merger becomes effective upon the filing of the articles of merger with the secretary of state pursuant to section 490.1106 or the date stated in the articles, whichever is later. 5. The effect of a qualified merger for a qualified survivor which is a cooperative association shall be as provided for in this chapter. The effect of a qualified merger for a qualified survivor which is a qualified corporation shall be as provided for corporations under chapter 490, subchapter XI. 6. The provisions governing the right of a shareholder or member of a cooperative association to object to a merger or the right of a member to dissent and obtain payment of the fair value of an interest in the cooperative association in the case of a merger as provided in this chapter shall apply to a qualified merger. The provisions governing the right of a shareholder of a corporation to exercise appraisal rights and obtain payment of the fair value of the shareholder’s shares in the case of a merger as provided in chapter 490, subchapter XIII, shall apply to a qualified merger. 7. A foreign cooperative association may participate in a qualified merger as provided in this section, if the foreign cooperative association complies with the requirements for a cooperative association under this section and the requirements for a foreign cooperative association under section 499.69. A foreign corporation may participate in a qualified merger as provided in this section if it complies with the requirements of a qualified corporation under this section and the requirements for a foreign corporation under section 490.1102. 97 Acts, ch 17, §9; 2002 Acts, ch 1154, §107, 125; 2019 Acts, ch 24, §104; 2021 Acts, ch 165, §224, 225, 230

Iowa Code § 499.70 Abandonment before filing.

499.70. Abandonment before filing. At any time prior to the filing of the articles of merger or consolidation, the merger or consolidation may be abandoned pursuant to provisions set forth in the plan of merger or consolidation. [C71, 73, 75, 77, 79, 81, §499.70]

Iowa Code § 499.71 Other laws applicable.

499.71. Other laws applicable. The provisions of this subchapter shall also apply to cooperative associations organized under chapters 497 and 498. [C71, 73, 75, 77, 79, 81, §499.71] 2014 Acts, ch 1026, §143

Source: Iowa Legislature (legis.iowa.gov)URL: https://www.legis.iowa.gov/law/iowaCode/sections?codeChapter=499&year=2026Fetched: 10/20/2026