Chapter 3: M&A Sell Side Transactions Flashcards
1
Q
Divesture
A
The sale, exchange, or disposal of an asset.
2
Q
Spinoff
A
Type of divesture where a subsidiary or division of a parent company becomes an independent company.
3
Q
Stock Purchase
A
Buyer acquires the stock of the target. Can be structured as a tax free transaction.
4
Q
Asset Purchase
A
Buyer acquires some or all of a target’s assets with cash, stock, etc. Can have tax consequences.
5
Q
Merger
A
The combination of two companies where one or both cease to exist as legal entities. Can be structured as a tax free transaction.
6
Q
IRC Section 388(h)(10) Election
A
Allows both the buyer and seller to treat a stock transaction as an asset transaction for tax purposes.
