What is an acquisition structure?
In a friendly takeover, an acquisition structure sets out the framework, and the terms and conditions for the purchase or sale of a company. It considers the company's value and structure and lays out the specifics of the deal for example, which assets will be included in the sale.
Where have you heard about acquisition structures?
Acquisitions and mergers are regular features in the financial press. The general structure of these acquisitions are covered in the news but the minutiae of the deals are usually kept well within the confines of the boardroom.
What you need to know about acquisition structures.
Acquisitions can be structured in different ways depending on the objectives of the buyer and the seller.
In a share transaction, one company buys another business in its entirety, including any future liabilities, loans and debts owed. Once sold, the bought business may remain as a subsidiary of the acquiring company, or it may absorbed into the buying company.
In an asset acquisition, the buying company only purchases the specified assets and liabilities – for instance, the company's inventory and property, or even its customer lists, brands, patents and trademarks.
Two companies can also join to form one legal entity known as a merger.
Find out more about acquisition structures.
Find out more about different types of mergers and how acquisitions can be both friendly and hostile.