Series 79 practice questioneasyTypes of M&A Transactions
Which transaction structure results in the target surviving as a separate legal subsidiary of the buyer?
- AStock purchase✓ Correct answer
- BAsset purchase
- CSpin-off
- DTender offer amendment
Explanation
Why A — Stock purchase
Stock purchase In a stock purchase, the buyer acquires the target’s equity and the legal entity usually remains intact. That can preserve contracts and permits, but it also means the buyer generally assumes the entity’s liabilities.
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