Corporate Acquisitions in General
A corporate acquisition is a strategic decision that can have several underlying motives and goals. The acquiring company’s motives often include business growth or expansion to new markets or industries. The buyer may also acquire a company or a business only in order to sell it to a new buyer, possibly after refinement and against a higher consideration. On the other hand, it may be in the interests of the sellers to withdraw from the business in question, for example to improve their financial position, or to focus on other core businesses. In intra-group transactions, background motives are often related to improving efficiency of the group, for example in relation to financing and fiscal issues, or business restructuring.
A corporate acquisition can principally be conducted as an acquisition of shares [6.3.3 Acquisition of Shares] or as an acquisition of assets [6.3.4 Acquisition of Assets]thereof. The target in an acquisition of assets is the business of the company or a part of it, including the factors of production and agreements. Usually personnel is also included in the acquisition.
The deciding factors while planning and choosing the method of acquisition are usually the purpose of the transaction and future plans for the business. It is also important to take into account requirements arising from applicable legislation, in particular corporate, labor and tax law, and the effect of such requirements for structuring of the transaction.