Private Acquisition Structures

by Practical Law Corporate & Securities

This Note provides an introduction to private acquisition structures, focusing on asset acquisitions, stock acquisitions, and mergers. It explores the factors influencing the choice of acquisition structure, such as commercial issues, process and consents, and tax considerations. Asset acquisitions allow buyers to select specific assets and liabilities, offering flexibility but requiring detailed transfers and third-party consents. Stock acquisitions involve purchasing the target company's stock, simplifying the process but assuming all liabilities. Mergers, including forward and reverse triangular mergers, combine entities into one, are governed by state laws and require specific consents. This Note assumes private transactions, addresses US federal income tax issues, and highlights the importance of understanding legal requirements and tax considerations in structuring successful acquisitions.