Buyout Meaning: Definition, Examples, and Translations
💰
buyout
[ˈbaɪˌaʊt ]
Definitions
business
An act of purchasing a company or a controlling interest in a company, typically by another company.
Synonyms
acquisition, merger, takeover.
Which Synonym Should You Choose?
| Word | Description / Examples |
|---|---|
| buyout |
Best used in situations where one party purchases the entire stake or shares of a company, usually to gain full control.
|
| acquisition |
Commonly used when one company purchases most or all of another company's shares to gain control of that company, usually as part of corporate expansion or diversification.
|
| takeover |
Often has a more aggressive connotation, typically used when one company makes a bid to assume control of another company, possibly against the wishes of the target company's management.
|
| merger |
Appropriate for situations where two companies agree to combine and form a new entity. It implies a sense of partnership or collaboration without one dominating the other.
|
Examples of usage
- The buyout of the company was completed by a larger corporation.
- After the buyout, there were significant changes in the company's management.
- The buyout deal was worth millions of dollars.
employment
A payment made to an employee who is leaving a company, often as part of a redundancy or retirement package.
Synonyms
compensation, severance pay.
Which Synonym Should You Choose?
| Word | Description / Examples |
|---|---|
| buyout |
Used in a business context when one company purchases a significant portion or all of another company's shares to gain control. Often mentioned in mergers and acquisitions.
|
| severance pay |
Used specifically in an employment context to refer to the payment given to an employee when they are laid off or terminated. Usually mentioned during discussions of employee rights and benefits.
|
| compensation |
General term used to describe the act of providing payment or benefits for work performed, damages, or losses. Frequently used in employment and legal contexts.
|
Examples of usage
- He received a generous buyout when he decided to retire early.
- The company offered a buyout to reduce its workforce.
Translations
To see the translation, please select a language from the options available.
Interesting Facts
Business
- Buyouts can occur in various forms, including management buyouts (MBOs) where existing managers purchase the business.
- Leveraged buyouts (LBOs) involve significant debt to acquire a company, with cash flow used to pay back the loan.
- Often, companies in distress are targets for buyouts as they can be acquired at lower prices.
Pop Culture
- The concept of buyouts is often dramatized in movies, showcasing intense negotiations and corporate espionage.
- Reality TV shows like 'Shark Tank' depict buyouts in a simplified form, where investors buy into a company idea.
- In the tech industry, numerous high-profile buyouts have shaped major companies, like Google's acquisition of YouTube.
Legal
- Negotiating a buyout often involves complex legal contracts that detail the terms of the sale.
- In cases of employee buyouts, laws regarding severance and employee rights can come into play.
- Regulatory bodies may scrutinize large buyouts to prevent monopolistic practices.
Economics
- Buyouts can be a strategy for consolidating market share and improving efficiencies within an industry.
- Economic downturns can lead to an increase in buyout activity as companies seek to acquire struggling competitors.
- Buyouts can also impact stock markets, signaling shifts in corporate control and potential growth.
Origin of 'buyout'
Main points about word origin
- The term combines 'buy', meaning to purchase, and 'out', implying removal or acquisition.
- It became popular in business language in the late 20th century as corporate strategies evolved.
- The use of the term has been formalized in financial contexts, typically dealing with acquisitions.
The term 'buyout' originated in the business world in the mid-20th century. It is derived from the verb 'buy out', which means to purchase all of something, such as a company or a person's share in a business. Buyouts have become common in corporate finance as a strategy for taking control of another company or consolidating ownership. The concept of buyouts has evolved over time to include various forms such as leveraged buyouts and management buyouts, each with its own set of implications and risks.