Buy Side Structuring

There’s a lot of noise thrown around in discussing M&A structuring and the terms used – 338(h)(10), reverse triangular, double dummy, F reorganization – are all relevant and important…  

…to the lawyers.  

To the business people, there’s one primary issue: what are the tax attributes that I’m going to get out of this acquisition? 

And the answer to that question largely depends on whether you’re buying assets (for tax purposes) or stock (for tax purposes). The reason for the parentheticals is simple – a lot of those confusing terms are ways for lawyers to turn one legal structure into different treatment for tax purposes.  So ignore all of those terms – just ask whether it’s an asset deal or a stock deal for tax purposes. 

Because any transaction is a negotiation between buyer and seller, any structure should seek optimal tax results for both parties on an overall basis.