Acquisition
An ‘acquisition’ or ‘takeover’ is the purchase by one person, of controlling interest in the share capital, or all or substantially all of the assets and/or liabilities, of the target. A takeover may be friendly or hostile, and may be effected through agreements between the offeror and the majority shareholders, purchase of shares from the open market, or by making an offer for acquisition of the target’s shares to the entire body of shareholders.Acquisitions may be by way of acquisition of shares of the target, or acquisition of assets and liabilities of the target. In the latter case the business of the target is usually acquired on a going concern basis. Such a transfer is referred to as a ‘slump sale’ under the ITA and benefits from favourable taxing provisions visà-vis other transfers of assets/liabilities.