Brief Definition
An asset deal is a type of business transaction where a buyer purchases specific assets of a company rather than buying the company’s stock or equity.
Further Explanation
An asset deal is a type of business transaction where a buyer purchases specific assets of a company rather than buying the company’s stock or equity. This method allows the buyer to select which assets and liabilities to acquire, often avoiding unwanted liabilities. The assets involved can include equipment, inventory, intellectual property, real estate, and contracts.
Example:
Company A wants to buy the manufacturing division of Company B. Instead of purchasing Company B entirely, Company A decides to buy only the machinery, inventory, and patents related to the manufacturing division. This way, Company A does not take on any of Company B’s debts or other obligations.