What are the most common transactions types in a M&A transaction?
An M&A transaction involving the purchase of a private Canadian business can be done either through a share purchase transaction or an asset purchase transaction. There is also the option to amalgamate, whereby the purchasing business or its subsidiary amalgamates with the target corporation.
What is a share purchase transaction in an M&A?
A share purchase involves purchasing all or a majority of the issued and outstanding shares of a target corporation. A share purchase transaction is simply a transfer of the shares representing the ownership of the corporation through which the business is run.
What is an asset purchase transaction in an M&A?
An asset purchase transaction involves the purchase of assets, and in many cases the assumption of certain liabilities, from the seller and is typical of a transaction where only a singly property or division is of interest, or where the new owner wishes to cap liability exposure.
What is an amalgamation in an M&A?
An amalgamation is a type of merger typical when the target company have a large number of shareholders or option holders. It involves the merger or amalgamation of the acquiring corporation or a subsidiary of the acquiring corporation with the target corporation. An amalgamation is a type of merger since it involves the merging of two previously distinct entities into one.
