eli5: how does a company ‘buy themselves back’

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Say a large company bought out a smaller one. Then in a years time the smaller one bought them selves again, how does that work. Do the board gather round and chip in, do they have a constant IOU to the parent company until it’s all been paid, can the original owner pay it back off again?

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Anonymous 0 Comments

When you buy a company. You are buying the name of the company. If you have the infrastructure in place and don’t need any assistance from the owner, then it’s a pretty clean break. Take a look at Gretsch Guitars. They were owned by the Gretsch family, then purchased by Baldwin, then purchased again by the Gretsch family, and now Fender controls their distribution.

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