In an asset deal, what does the buyer acquire?

In an asset deal, what does the buyer acquire?

• A. The shares of the selling company
• B. The company and its liabilities
• C. The assets directly
• D. The tax credits associated with the company

Answer: (C)

In an asset deal, the buyer acquires the specific assets of the selling company rather than the company itself. This means that the buyer can selectively choose which assets to purchase, which may include real property, equipment, inventory, intellectual property, and any other tangible or intangible assets that are deemed valuable. This structure is advantageous for buyers because it allows them to avoid inheriting the selling company's liabilities (such as debt or legal obligations), which might occur in a share deal where the buyer acquires the company as a whole. Additionally, the buyer can tailor the acquisition to align with their strategic goals by picking only the most beneficial assets, thus providing greater flexibility in structuring the deal. In contrast, acquiring shares of the company involves taking on all assets and liabilities associated with that entity, which is a different transaction structure altogether. Similarly, acquiring tax credits is not a direct aim of an asset deal; while the buyer may gain certain tax benefits depending on the nature of the assets acquired, it is not a direct acquisition of those credits.

In an asset deal, the buyer acquires the specific assets of the selling company rather than the company itself. This means that the buyer can selectively choose which assets to purchase, which may include real property, equipment, inventory, intellectual property, and any other tangible or intangible assets that are deemed valuable.

This structure is advantageous for buyers because it allows them to avoid inheriting the selling company's liabilities (such as debt or legal obligations), which might occur in a share deal where the buyer acquires the company as a whole. Additionally, the buyer can tailor the acquisition to align with their strategic goals by picking only the most beneficial assets, thus providing greater flexibility in structuring the deal.

In contrast, acquiring shares of the company involves taking on all assets and liabilities associated with that entity, which is a different transaction structure altogether. Similarly, acquiring tax credits is not a direct aim of an asset deal; while the buyer may gain certain tax benefits depending on the nature of the assets acquired, it is not a direct acquisition of those credits.