5. Market Regulations

Tax consideration
1. Sellers
  1. Buyers
    1. Taxable
      1. Asset acquisition
        Implications
        Stepping up
        Possible to amortise acquired goodwill arising from asset acquisition
        Stock acquisition
        Implications
        Step up = taxable gain
        Double taxation
        Benefit for acquirer if section 338
        Nota:
        80 % or more of voting stock
        May handle as asset acquisition
        Tax free transactions
        Requirements
        Continuity of ownership
        Contiuity of business enterprice
        Valid business purpose
        Step transaction doctrine
        Tax free structures
        Type A
        Type B
        Type C
        Type D
        Forward triangular merger most used for tax free asset acquisition
        NOL
        Carrybacks
        Carryforwards
        Tax inversion
        Change domicile
        Cross border
      2. Non-equity usually taxable
        Shareholders pay if stock aquisition
        Firm pay if asset acquisition
        Imidiate gain recignised by target shareholders
        Acquirer loses NOLS and tax credits???
    2. Increase tax basis
      1. Relocate tax domicile
  2. Demand higher price for taxable transaction
M&A Market reulations
1. Equality of treatment
  1. Mandatory offer above ownership treshold
    1. Certainty of financing
      1. Squeexe out rights
2. Legislation
  1. Companies act
    1. City code
      1. Eu competition rules
        Listing rules
  2. Launching bid
    1. Firstly to target
      1. Public announcement
        Putup or shut up

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5. Market Regulations

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