Where does the money go for company buyouts?

Question

Say that we have two companies, Alpha and Bravo, neither have parent companies.

Alpha wants to buy out Bravo for 30 Million. Bravo accepts. Where does that money go? If it goes to Bravo but that’s under Alpha now, wouldn’t that just be Alpha paying themselves?

In: Economics

Answer 1

It goes to the shareholders of Bravo, whether it’s a public company or privately held. It may be straight cash, shares of Alpha worth what the deal is for or a combination.