In an asset acquisition, the buyer only acquires the assets and liabilities it identifies and agrees to acquire and assume, subject to any liabilities imposed on the buyer as a matter of law. The ability to pick and choose specific assets and liabilities provides the buyer with flexibility. The buyer does not waste money on unwanted assets and there is less risk of the buyer assuming unknown or undisclosed liabilities. However, this also makes asset acquisitions more complex because the buyer has to spend time identifying the assets and liabilities it wishes to acquire and assume.

Asset acquisitions generally require more formalities and documents than stock acquisitions and mergers because it requires a transfer of each asset and liability from the target company. For example, in an asset acquisition:

This Toolkit contains continuously maintained standard documents, transaction guides and checklists to help counsel manage the transaction from preliminary planning through the negotiation of the asset purchase agreement and closing of the transaction. For a comprehensive list of other available resources on this topic, see Topic: Private M&A.