Acquisition of Assets

A firm can effectively acquire another firm by buying most or all of its assets. This accomplishes the same thing as buying the company. In this case, however, the target firm will not necessarily cease to exist; it will have just sold off its assets. The "shell" will still exist unless its stockholders choose to dissolve it.

This type of acquisition requires a formal vote of the shareholders of the selling firm. One advantage to this approach is that there is no problem with minority shareholders holding out. However, acquisition of assets may involve transferring titles to individual assets. The legal process of transferring assets can be costly.

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