deal-structures
In deal slang, “APA” means we are buying assets, not the company. It signals a different tax profile, a consent-heavy closing, and a narrower liability perimeter than an SPA.
“We should do this as an APA.” That sentence usually appears after tax due diligence or legal due diligence finds something the buyer will not inherit: a tax exposure, a pension scheme, a polluted subsidiary, a customer book that is easier to assign than a share sale. The long-form instrument is the asset purchase agreement. This page is the dialect.
They are choosing perimeter. An APA lists assets, assumed liabilities and excluded liabilities. An SPA transfers the entity. Day-one operations on an APA can be harder — new contracts, employees transferring under local automatic-transfer rules, new VAT numbers — which is why some teams resist the flip even when tax prefers it.
A buyer wants a product line inside a larger group. An SPA on the subsidiary would include a discontinued factory and a litigation docket. The APA lists IP, inventory, named contracts and transferring employees. Closing becomes a project plan, not a share transfer form.
Saying APA when you still need the entity for licences that are non-assignable. Forgetting that “APA” in U.S. tax conversation can also mean advance pricing agreement — a completely different document. Assuming excluded liabilities stay excluded if you operate as a de facto successor.
The nickname does not tell you whether employees transfer, whether customers must consent, or how purchase price is allocated for tax.
Asset deals need a cleaner inventory of what the business is — contracts, IP, people, assets — than share deals. That inventory is a structured data problem. If it only exists as a lawyer’s schedule drafted at 2 a.m., closing will slip.