Transaction Structuring (Share Deal vs. Asset Deal)

​In general, a Transaction can be structured as an Asset Deal or as a Share Deal. The rule of thumb is that a Seller in most cases prefers a Share Deal while the Buyer tends to aim for an Asset Deal. Therefore, agreeing to the structure is typically one of the major negotiation points prior to agreeing to a Letter of Intent (LOI) or Memorandum of Understanding (MOU). Subsequent renegotiations of the Transaction Structure may have an adverse effect on the Purchase Price for the renegotiating party. Therefore, we recommend contacting our team prior to agreeing to an LOI or MOU.

In the U.S., the tax code allows, in certain situations, for a hybrid Transaction Structure where a Share Deal is treated as an Asset Deal for tax purposes, which may be an attractive alternative for both Buyer and Seller.

Our M&A tax professionals are experienced in multi-lateral transactions and will assist your legal advisor in setting up the Transaction Structure that suits your purpose.