425: Udemy-Coursera Merger Update: Lawsuits Prompt New Disclosures

Udemy provides an update on its pending merger with Coursera, addressing three lawsuits and issuing supplemental disclosures to the joint proxy statement/prospectus.

Summary

• Udemy, Inc. entered into an Agreement and Plan of Merger with Coursera, Inc. and Chess Merger Sub, Inc. on December 17, 2025.
• Merger Sub will merge with and into Udemy, with Udemy surviving as a direct, wholly owned subsidiary of Coursera.
• Coursera filed a registration statement on Form S-4 on February 25, 2026, which was declared effective on March 10, 2026.
• Coursera filed a final prospectus and Udemy filed a definitive proxy statement on March 10, 2026.
• Special meetings of stockholders for both Udemy and Coursera are scheduled for April 9, 2026, to vote on the merger.
• Three lawsuits have been filed challenging the Merger: Carroll v. Udemy, Inc. et al. and Wright v. Udemy, Inc. et al. in New York Supreme Court, and Zalvin v. Abbasi, et al. in California Superior Court.
• Demand letters from purported stockholders also allege deficiencies and/or omissions in the Joint Proxy Statement/Prospectus.
• Udemy and Coursera believe the allegations are without merit but are voluntarily providing Supplemental Disclosures to avoid nuisance, cost, distraction, and efforts to delay the merger.
• The Supplemental Disclosures amend various sections of the Joint Proxy Statement/Prospectus, including details on the Coursera M&A Committee, Udemy Board discussions, and financial analyses by Morgan Stanley and Qatalyst Partners.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a moderately negative development. While the merger is progressing, the emergence of multiple lawsuits and the necessity for supplemental disclosures, even if voluntary, introduces legal uncertainty and potential for distraction, which could impact investor confidence and the smooth execution of the transaction.

Positives

• The merger process is progressing towards stockholder meetings scheduled for April 9, 2026.
• Udemy's Board determined that an all-stock combination maximizing pro forma ownership for Udemy Stockholders would be more favorable than a cash and stock mix.
• Preliminary assessments of potential synergies between Udemy and Coursera have been discussed.

Negatives

• Three lawsuits have been filed challenging the merger, alleging disclosure deficiencies and/or incomplete information.
• Demand letters from purported stockholders also allege deficiencies in the Joint Proxy Statement/Prospectus.
• Udemy and Coursera are voluntarily issuing supplemental disclosures to address these claims, despite believing them to be without merit, to avoid nuisance, cost, and potential delays.

Risks

• General economic, market, or business conditions, including competition, and risks related to online learning solutions and AI innovations.
• The effect of the merger announcement on the ability of Coursera or Udemy to retain and hire key personnel and maintain relationships with customers, vendors, and others.
• Disruption of current plans and operations and potential difficulties in attracting and retaining qualified personnel as a result of the business combination.
• The outcome of any legal proceedings related to the business combination.
• The ability of the parties to consummate the proposed transaction on a timely basis or at all.
• The satisfaction of the conditions precedent to consummation, including securing regulatory approvals on the terms expected, at all, or in a timely manner.
• The ability to successfully integrate Coursera's and Udemy's operations and business on a timely basis or otherwise.
• Coursera's and Udemy's ability to implement plans, forecasts, and other expectations with respect to the combined company's business and realize expected synergies and other benefits.
• The amount of the costs, fees, expenses, and charges related to the proposed combination.
• Fluctuations in the prices of Coursera or Udemy stock.
• Potential business disruptions following the business combination.
• There can be no assurance that additional lawsuits or demands will not be filed or made against Udemy and/or Coursera with respect to the Merger.

Future Outlook

The combined company aims to realize expected synergies and benefits from the merger. Udemy management adjusted Coursera's standalone projections, extrapolating revenues through 2035 and assuming a gradual expansion of Adjusted EBITDA margin to 28% by 2035.

Management Comments

• Udemy and Coursera believe that the allegations in the Matters are without merit.
• Udemy and Coursera believe that the disclosures set forth in the Joint Proxy Statement/Prospectus comply with applicable law and stock exchange rules and that no further disclosure beyond that already contained in the Joint Proxy Statement/Prospectus is required under applicable law or stock exchange rules.
• However, in order to moot such disclosure claims, to avoid nuisance, cost and distraction, and to preclude any efforts to delay the completion of the Merger, and without admitting any culpability, liability or wrongdoing and without admitting the relevance or materiality of such disclosures, Udemy and Coursera are voluntarily supplementing the Joint Proxy Statement/Prospectus.
• The Udemy Board concurred with the Udemy Strategic Committee's determination that an all-stock combination with Coursera that maximizes the pro forma ownership of the combined company by Udemy Stockholders would be more favorable to Udemy Stockholders.
• The Udemy Board directed Morgan Stanley to deliver a counterproposal to Coursera for an all-stock combination with Udemy pursuant to which Coursera would issue a fixed exchange ratio of 0.850 shares of Coursera Common Stock in respect of each share of Udemy Common Stock, implying approximately 43% pro forma ownership of the combined company by Udemy Stockholders.

Industry Context

StockSavvy.ai notes that the merger between Udemy and Coursera represents a significant consolidation within the rapidly evolving digital education industry, driven by the increasing demand for online learning solutions and the strategic integration of AI innovations. The combined entity aims to leverage scale and potentially achieve synergies in a competitive landscape, positioning itself for growth in a market undergoing continuous transformation.

Comparison to Industry Standards

• Morgan Stanley performed a public trading comparables analysis, comparing Udemy and Coursera to selected companies in the digital education industry including American Public Education, Inc., FranklinCovey Co., Strategic Education, Inc., Perdoceo Education Corporation, Docebo Inc., Skillsoft Corp., and University of Phoenix.
• The analysis utilized consensus estimates of 2026 and 2027 revenue for each comparable company to calculate Aggregate Value (AV) to revenue multiples (AV/Revenue).
• Morgan Stanley considered premiums paid in 42 precedent acquisition transactions since 2004 where the consideration was at least 90% stock, the equity value was $1.0 billion or more, and the acquiring company stockholders retained between 40% and 45% ownership in the combined company. The median premium paid in these selected transactions was 5%.

Corporate Governance

Legal Proceedings

• Three complaints challenging the Merger have been filed: Carroll v. Udemy, Inc. et al. (No. 651629/2026) and Wright v. Udemy, Inc. et al. (No. 651672/2026) in New York Supreme Court, and Zalvin v. Abbasi, et al. (No. CGC26635114) in the Superior Court of the State of California.
• Demand letters have been received from certain purported stockholders of Udemy and Coursera, alleging deficiencies and/or omissions in the Joint Proxy Statement/Prospectus.
• Udemy and Coursera believe that the allegations in these matters are without merit and are voluntarily providing supplemental disclosures to avoid nuisance, cost, and distraction.

Stakeholder Impact

• Shareholders: Will vote on the merger on April 9, 2026. Udemy stockholders are expected to receive 0.850 shares of Coursera Common Stock for each Udemy share, implying approximately 43% pro forma ownership of the combined company. The lawsuits and supplemental disclosures could introduce uncertainty regarding the merger's value and certainty.
• Employees: The business combination introduces risks related to the ability to retain and attract qualified personnel, as well as potential disruptions to current plans and operations.
• Customers/Vendors: There are risks related to maintaining relationships with customers and vendors following the business combination.

Next Steps

• Udemy and Coursera will hold special meetings of their stockholders on April 9, 2026, to vote on the transactions contemplated by the Merger Agreement.
• The parties will work towards the consummation of the proposed transaction, subject to the satisfaction or waiver of specified conditions.
• Following the merger, the combined company will focus on integrating operations and realizing expected synergies and other benefits.

Key Dates

Recommendation

The merger between Udemy and Coursera is a significant strategic move with potential long-term synergies in the online education sector. However, the emergence of multiple lawsuits challenging the merger and the need for supplemental disclosures introduce a degree of uncertainty and potential for distraction. While management asserts the claims are without merit and the disclosures are voluntary, these legal challenges could impact the timeline or terms, or at least create negative sentiment. Investors should hold their positions, closely monitor the outcome of the stockholder meetings on April 9, 2026, and any further legal developments, as the fundamental strategic rationale remains, but execution risk has increased.

Keywords

Udemy, Coursera, Merger, Acquisition, SEC Filing, Form 8-K, Proxy Statement, Stockholder Meeting, Litigation, Online Education, Digital Learning, M&A, Corporate Governance, Financial Analysis, Valuation