5 Types of Mergers and Acquisitions Transactions

There are essentially 5 types of mergers and acquisition. Once the appropriate type of M&A is selected, there are virtually an infinite number of ways that the specific deal can be structured.

The specific deal structure will be determined by the financial, strategic, and tax objectives of the buyer and seller.

1. Asset Purchase

Simplest deal structure in which buyer purchases specific assets from the seller. Buyer pays cash or other assets.

2. Stock Purchase

Buyer purchases shares of the business from the seller’s shareholders. Buyer pays cash or other assets.

3. Statutory Merger

Non-taxable deal structure in which one business absorbs the other business in a merger.

4. Stock-for-Stock Acquisition

Acquirer exchanges its stock for the stock of the acquired company

5. Stock-for-Assets Acquisition

Generally a non-taxable transaction in which the acquirer exchanges its stock for the assets of the acquired business.

About 

Kris Tabetando provides mergers & acquisitions (M&A) advisory and brokerage services to online businesses. He also partners with investors to acquire & manage online businesses.

    Connect with Kris:
  • linkedin