What types of corporate mergers and acquisitions are there?

Corporate mergers and acquisitions are broadly divided into acquisitions and mergers, and acquisitions are further classified into several types depending on the method.

The most common type of corporate merger and acquisition is the share transfer method, a structure in which the acquiring company obtains newly issued or existing shares to secure management control of the selling company.

Next, the business transfer method is a form of corporate merger and acquisition in which all or part of a business is transferred by contract, and not only the assets and know-how but also whether employment relationships are succeeded to can vary depending on the terms of the contract.

The asset transfer method is a corporate merger and acquisition in which only specific assets, such as real estate or intellectual property rights, are selectively acquired, and it is characterized by the fact that the company's organization and workforce are not succeeded to.

A merger, on the other hand, is a form of corporate merger and acquisition in which two or more companies are integrated into one, and it is divided into an absorption merger, in which an existing company survives and absorbs the other, and a consolidation merger, in which a new company is established.

Because the legal and financial effects of a corporate merger and acquisition vary greatly depending on its purpose and structure, it is above all important to proceed only after accurately understanding the differences among the types.

For details, we recommend reviewing the transaction structure, legal risks, and the possibility of future disputes together through a consultation with an attorney specializing in corporate mergers and acquisitions.