In finance, a buyout is an investment transaction by which the ownership equity, or a controlling interest of a company, or a majority share of the capital stock of the company is acquired. The acquirer thereby "buys out" the present equity holders of the target company. Shareholder activism can result in buyouts. A buyout will often include the purchasing of the target company's outstanding debt, which is referred to as "assumed debt" by the purchaser. It is usually synonymous with "acquisition".
In finance, a buyout is an investment transaction by which the ownership equity, or a controlling interest of a company, or a majority share of the capital stock of the company is acquired. The acquirer thereby "buys out" the present equity holders of the target company. Shareholder activism can result in buyouts. A buyout will often include the purchasing of the target company's outstanding debt, which is referred to as "assumed debt" by the purchaser. It is usually synonymous with "acquisition".
==Types== Buyouts can often occur when a business is considered to be underperforming and there is an opportunity to improve performance. Types of buyouts include management buyouts, where the management of an enterprise seeks to acquire the business from the existing owners, leveraged buyouts, where the purchaser takes out a loan to make the purchase, frequently secured against the assets of the business they are purchasing and employee buyouts, where the employees of a business collectively purchase the company, often occurring when there is a belief that selling to an external party would be undesirable and within smaller businesses.
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