Asset deal vs share deal

Definition

This is the most structural decision in an M&A negotiation, and in 80% of Benelux SME deals it gets made on tax-financial grounds rather than operational ones. The economic logic runs diametrically opposite for seller and buyer, which explains why the choice absorbs so much negotiation time.

Tax: the centre of gravity. In Belgium the capital gain on shares for individuals is taxed at 10% since 2026 (within specific statutory bands); capital gain on assets within the company falls under standard corporate tax (25%). For an individual selling their SME, the share deal is therefore typically more tax-attractive: before the 2026 regime, share-gain was often fully exempt under normal-management taxation. In the Netherlands a 26.9% box-2 tax applies to capital gain on substantial-interest shares (>5%); here too share deal is usually more favourable for the seller. Buyers, conversely, prefer asset deal because acquired assets can be revalued for tax (step-up basis), generating higher depreciation and lower future tax.

Liability is the second large theme. In a share deal the buyer acquires the company including all known and unknown obligations: historical tax claims, environmental contamination, dormant legal disputes, pension obligations. R&W clauses and escrows limit this risk but never eliminate it. In an asset deal the buyer explicitly picks which assets and which contracts transfer; anything not expressly transferred stays behind in the selling company. For businesses with material historical risk (manufacturing with environmental issues, sectors with large tax history) this pushes buyers toward asset deal, often hard.

Continuity is the third theme and is often underrated. In a share deal the company remains legally the same entity; all contracts (customers, suppliers, leases, loans, licences) continue automatically without redrafting. In an asset deal every contract must be transferred individually, requiring counterparty consent and in practice weeks to months of administration. For B2B service businesses with hundreds of customer contracts, share deal is often operationally unavoidable, regardless of tax impact.

In Benelux practice as of 2026, about 75% of SME transfers run as share deals and 25% as asset deals, with the balance shifting toward asset deal as deal size rises and buyer-side risk aversion gets heavier. Below €5m EV: 85% share deal. Between €5m and €25m: 70/30. Above €25m: 55/45, with the choice strongly buyer-driven. A hybrid structure: share deal with a pre-closing "spin-off" of risky activity into a separate company: is a third route that works elegantly for specific situations (e.g. carving out a division within a holding).

Worked example

A Belgian family manufacturing firm with €12m EV was negotiated in 2026. Seller, an individual, preferred share deal (10% tax on the gain ≈ €1.2m). Buyer, a French PE platform, preferred asset deal for risk containment (the factory site had unclear environmental history). Compromise: share deal with a pre-closing carve-out of the real estate into a freshly incorporated separate company that leased back to the main entity. Result: seller retained the tax advantage of the share deal on the operating business; buyer isolated the property risk in a vehicle outside their direct legal exposure. Structure added €45k of extra legal hours and a year of planning before closing: but gave both sides what they needed.

When it matters

In every meaningful transfer. The decision typically gets made in the LOI phase and is hard to reverse without unwinding the entire deal. Three questions every seller should answer before LOI: (1) what is the tax impact of both structures in my specific situation (consult a tax advisor, not just an M&A lawyer), (2) which historical liabilities must I disclose under buyer DD, (3) how many contract novations does the business operationally need: if it's more than 50, asset deal becomes logistically painful.

Frequently asked

Which structure is more tax-favourable for a Belgian seller in 2026?

Typically share deal for individuals: share-gain has been taxed at 10% since 2026 within specific statutory bands, versus 25% corporate tax on asset-gain within the company. For company-to-company transactions the calculus differs and you're best advised to consult a tax specialist per case.

Why do buyers prefer asset deal when sellers want share deal?

Three reasons: (1) selective acquisition of assets without unknown historical liabilities, (2) tax step-up on acquired assets (higher depreciation base, lower future tax), and (3) cleaner R&W allocation. Some buyers pay 5-10% extra for the asset-deal structure as compensation to the seller.

What are the operational pitfalls of an asset deal?

Every contract (customers, suppliers, lease, licence, loan, pension) must be individually transferred with counterparty consent. For businesses with hundreds of contracts this is a process of months. Personnel falls under CLA 32bis (BE) or comparable Dutch rules on transfer of undertaking, complicating HR administration while preserving employee protections.

Can I switch between asset deal and share deal mid-negotiation?

Theoretically yes, practically rare. The LOI typically fixes the structure, and renegotiating triggers price recalculation, tax replanning, DD-scope revision and legal rework. Budget 4 to 8 weeks of delay and €25-60k of extra legal cost if you renegotiate. Make the choice before LOI signing.