Optimal Deal Structure – M&A

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  • #36441
    Moazzam Khawaja
    Participant

    When negotiating an M&A transaction, there are many issues that should be addressed up front. typically, below alternatives exist for structuring a transaction:

    1) stock purchase; 2) asset sale; 3) merger

    It is important to recognize and address material issues such as: transfer of liability, third party consents, stockholder approval and tax consequences.

    What do you think from a buyer or a seller’s perspective?

    #51247
    Greg Jessup
    Participant

    From the perspective of the buyer I would much rather it be an asset sale. Much less complicated and you can pick and you can negotiate what assets are brought over.

    #51961
    Ruth Ng
    Participant

    From a seller viewpoint, it seems stock selling having the simplest process in comparison of asset sale and merger. If I had a choice, I won’t be strict into the merger unless a good reason.

    #55783
    Yanxuan Yang
    Participant

    It will always be on a case-by-case basis. From a seller perspective, some considerations would be whether I would like to retain control of the business operation, whether there is any benefits from doing a merger (e.g. tapping on a greater platform from the buyer), or whether a simple asset sale is sufficient because the ultimate goal is just to cash out.

    #56110
    Michel Kropf
    Participant

    I am not sure there is an optimal deal structure as it depends on many factors: specifics of the business, country tax and legal environment, time to complet the deal.

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