Asset Acquisition Strategy

What is an 'Asset Acquisition Strategy'

An asset acquisition strategy is the purchase of a company by buying its assets instead of its stock. An asset acquisition strategy may be used for a takeover or buyout if the target is bankrupt. Market knowledge, research and experience are important to a successful asset acquisition strategy. In some cases, a plan for selling the asset, called asset disposition, is built into the asset acquisition strategy.

BREAKING DOWN 'Asset Acquisition Strategy'

Bankruptcy proceedings represent an opportunity for a company to implement an asset acquisition strategy. By taking advantage of one company's distressed position, another company can purchase assets like equipment and machinery for its own business at reduced prices. The SEC requires public companies to report asset acquisitions and dispositions on form 8-K within four days of the transaction because these are considered "material events" that shareholders should know about.

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RELATED FAQS
  1. How do I evaluate whether a company is a good acquisition candidate?

    Evaluate whether a company is a good acquisition candidate by analyzing its price, debt load, litigation and financial statements. Read Answer >>
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    There is no tangible difference between an acquisition and a takeover; both words can be used interchangeably - the only ... Read Answer >>
  3. What is the difference between a merger and an acquisition?

    Read about the legal and practical differences between a corporate merger and corporate acquisition, two terms often used ... Read Answer >>
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    Learn why stocks are classified as financial assets, not real assets. Understand the properties that determine whether an ... Read Answer >>
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    Learn about the difference between mergers and acquisitions. Discover what factors may encourage a company to merge or acquire ... Read Answer >>
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    When a firm acquires another entity, there usually is a predictable short-term effect on the stock price of both companies. ... Read Answer >>
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