Asset Deal

In an asset deal, specified assets (plant, inventory, receivables, brands, contracts) pass to the buyer. The selling company remains, stripped of the transferred business. The buyer assumes only those defined assets and contracts; every other risk stays with the seller, and the step-up in book values brings higher depreciation. The cost is mechanical: each contract has to be novated, which needs the counterparty's consent (customers, suppliers, landlords). For the seller, an asset deal is often the less attractive tax route compared with a Share Deal, because disposal gains arise at once in the company. It is the usual route for a carve-out of a single line, or for a sale out of a sole proprietorship.