Legal Definitions - stock acquisition

Definition: Stock acquisition, also known as share acquisition, refers to the process of acquiring a corporation by purchasing all or most of its outstanding shares directly from the shareholders. This is often done as a takeover strategy.

Examples: When Company A wants to acquire Company B, it can do so by purchasing all or most of Company B's outstanding shares from its shareholders. This would be considered a stock acquisition. Another example would be if an individual investor wanted to acquire a controlling interest in a publicly traded company by purchasing a large number of its shares.

Explanation: In a stock acquisition, the acquiring company gains control of the target company by purchasing its shares from its shareholders. This allows the acquiring company to take over the target company's operations and assets without having to go through the process of acquiring them individually. This can be a quicker and more efficient way to gain control of a company, but it can also be more expensive as the acquiring company must pay a premium for the shares it is acquiring.