What do you as a company want to buy?
An acquirer can expand its operation either by acquiring the target as a whole or a part of the business
Almost all of the acquisition examples we witnessed were share sale, a business merging with or acquiring another
An acquisition can also be an asset sale if the acquirer doesn't want to own target as a whole but a specific division or unit of the target company
Share sale:
Essentially in share sale target's share acquired the entire business of the company.
Benefits for doing so are:
Synergies can be created as businesses may complement each other
Growth and market share can be gained
Technology or know-how can be acquired
Good human asset can be "acqui-hired"
But the main problem is due to detailed financial and legal processes it takes a longer period for complete acquisition.
Example: Kraft acquired Cadbury
Read the full case study from here:
Asset sale:
Here, the target's assets are acquired like land, factory, building, lease, domain, intellectual property, etc.
It basically takes a shorter acquisition period and has less legal and financial risk from an investor's point of view.
Example: Barclays acquired core business units of Lehman brothers
Read more details about this from TheGuardian's article
Happy reading....!!!!
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