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7 Cards in this Set

  • Front
  • Back
Types of Aquisitions
1. Asset Purchase
2. Stock Purchse
Asset Purchase
Acquirer purchses all or almost all or some of the selling company;s assets; cherry pick what you want; aquirer pays for what he/she wants and target company pays off existing liabilites not taken by aquirer; RESULTS in contract issues (warranties)
Stock Purchase
purchase all of the stock of the target company directly from target company shareholders; RESULTS in NO contract issues; Becomes a SUBSIDIARY of company
Merger (A + B = A)
Acquirer survives; acquirer buys all stock of target and then disolves target (bought out); RESULT contract issues with B company = they are voided
Merger (A + B = C)
Consolidation; both companies merge and create a new company; RESULTS all contracts voided
Poison Pill
flood the market with shares so company trying to buy you out has a difficult time gathering all the shares; can result in a duty of loyalty issue
Sarbanes Oxley Provisions
1. Personally certify the accuracy (making officers personally liable)
2. Auditors can not be consultants for company (at same time)
3. Create an Auditing Committee = board of directos whom are not part of the corp. outside of advisors; hold little to no stock in company