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Share Acquisition
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 To register the share acquisition
with the government has to deal with government processes that are slow and
difficult including getting much government paperwork, taking up with different
relevant authorities and so on. We guide the whole process to ensure that milestones
are met and transactions are successfully completed.
Flint Hong
Senior Manger
E-mail: consultant@jisitop.com
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DEFINITION OF 'ACQUISITION'
A corporate action in which a company buys
most, if not all, of the target company's ownership stakes in order to assume
control of the target firm. Acquisitions are often made as part of a company's
growth strategy whereby it is more beneficial to take over an existing firm's
operations and niche compared to expanding on its own. Acquisitions are often
paid in cash, the acquiring company's stock or a combination of both.
INVESTOPEDIA EXPLAINS 'ACQUISITION'
Acquisitions can be either friendly or
hostile. Friendly acquisitions occur when the target firm expresses its
agreement to be acquired, whereas hostile acquisitions don't have the same
agreement from the target firm and the acquiring firm needs to actively
purchase large stakes of the target company in order to have a majority stake.
In either case, the acquiring company often
offers a premium on the market price of the target company's shares in order to
entice shareholders to sell. For example, News Corp.'s bid to acquire Dow Jones
was equal to a 65% premium over the stock's market price.
A business combination can be effected as
either an asset acquisition or a stock acquisition.
Asset acquisition
The acquirer buys some or all of the
target's assets/liabilities directly from the seller. If all assets are
acquired, the target is liquidated.
Stock acquisition
The acquirer buys the target's stock of
from the selling shareholders.
Note that in a stock sale, the sellers are
the target's shareholders (which may be a corporate entity). In an asset sale,
the seller is a corporate entity. So, the type of acquisition will determine
who pays taxes on the transaction and the amount of taxes to be paid based on the
tax rate applicable to the seller.
Do not confuse the type of acquisition with
the form of consideration. A buyer may use either cash or stock (or a
combination thereof) as consideration in exchange for the assets or stock of
the target.
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