An asset repurchase agreement (APA) is an agreement between a buyer and a seller that concludes the terms and conditions for the purchase and sale of a company`s assets.   It is important to note in an APA transaction that it is not necessary for the buyer to purchase all of the company`s assets. Indeed, it is customary for a buyer to exclude certain assets in an APA. The provisions of an APA may include payment of the purchase price, monthly payments, pawn and asset charges, closing condition, etc.  An APA is different from a share purchase agreement (SPA) in which business shares are also sold, ownership of assets and ownership of liabilities.  In an APA, the buyer must choose certain assets and avoid redundant assets. These facilities are broken down according to an APA schedule. The buyer in a SPA buys shares in the company. In this case, there is no need to revalue the transfer of ownership of the company.
The APA is the legal mechanism for merging or acquiring businesses.  In addition to the flexibility to sell only certain assets and not the entire business, asset acquisition agreements generally contain detailed provisions regarding the transfer of liabilities from the seller. PROJECT FOR THE BREXIT: What does the IP closing date mean for contractual clauses, see practical mentions: The brexit-IP closing date affects private contracts for the sale and sale of mergers and acquisitions, what does the IP closing date mean for contractual terms? and Brexit – drawing up clauses on the boiler platform. The determination and taxation of behaviours is an important objective of the APA.  The buyer must represent his power to acquire the asset. The seller must represent his power to sell the asset. In addition, the seller argues that the purchase price of the asset is equal to its value and that the seller is not in financial or legal difficulty. The oil and gas industry does not distinguish between an asset and the purchase of shares when it designates its corresponding sales contract.
In this sector, whether it is the purchase of assets or shares, the final agreement is called the Purchase and Sale Contract (PSA). In a merger or acquisition transaction, asset purchase agreements have a number of advantages and disadvantages in relation to the use of a share purchase agreement or a merger agreement. In the event of a share acquisition or merger, the buyer receives all the assets of the target, without exception, but also automatically assumes all the liabilities of the target. An asset acquisition contract not only allows a transaction that transfers only a portion of the assets (which is sometimes desired), but also allows the parties to negotiate what liabilities of the target are explicitly borne by the buyer and allows the buyer to leave behind liabilities that he does not want (or does not know).