buyout

noun
buy·​out | \ ˈbī-ˌau̇t \

Definition of buyout

 (Entry 1 of 2)

1 : an act or instance of buying out
2 : a financial incentive offered to an employee in exchange for an early retirement or voluntary resignation

buy out

verb

Definition of buy out (Entry 2 of 2)

transitive verb

1 : to purchase the share or interest of
2 : to purchase the entire stock-in-trade and the goodwill of (a business)

Examples of buyout in a Sentence

Recent Examples on the Web: Noun

Marco Belinelli and Ersan Ilyasova were outstanding pickups in the buyout market and should continue to be productive in the playoffs. 4. Jeff Zillgitt, USA TODAY, "Five reasons the Philadelphia 76ers are the favorites in the East after ousting Miami Heat," 24 Apr. 2018 Much has been made of a suddenly weak, insecure-looking bench, and that will be the focus of any activity on the buyout market, but the first quarter is the province of Kerr’s starting lineup. Bruce Jenkins, San Francisco Chronicle, "Sleepy Warriors awaken once again," 10 Feb. 2018 The parties agreed on buyout packages for close to 20 percent of editorial staff members. Shirin Ghaffary, Recode, "As digital media companies brace for change, unions try to cushion the blow," 26 Dec. 2018 Last month, the company offered long-serving salaried employees the option to take a buyout package that was worth six months of pay. Timothy B. Lee, Ars Technica, "GM axes Volt, Cruze, and Impala for North America in cost-cutting move," 26 Nov. 2018 Barring something spectacularly unforeseen, Moore will be given a $750,000 buyout instead of the Rangers exercising a $10 million option. Jeff Wilson, star-telegram, "Rangers Reaction: How Gallardo could be pitching himself into Rangers' plans for 2019," 29 June 2018 The company recently offered buyouts to more than one-third of its 50,000 salaried employees in North America, citing the need for belt-tightening, while the economy and car market remain relatively strong. Kim Mackrael, WSJ, "General Motors Expected to Shut Down Operations in Oshawa, Ontario," 25 Nov. 2018 According to Huffington Post reporter Dave Jamieson, GM has set aside $2 billion to pay for layoffs and buyouts. Aditi Shrikant, Vox, "General Motors is cutting 14,000 jobs and focusing on self-driving and electric vehicles," 26 Nov. 2018 Apollo, which raised $24.6 billion last year for the largest private-equity fund ever and is also known for doing big buyouts, has yet to do a deal of that magnitude. Miriam Gottfried, WSJ, "Johnson Controls Hits Snag in Process to Sell Car-Battery Business," 8 Nov. 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'buyout.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of buyout

Noun

1907, in the meaning defined at sense 1

Verb

1598, in the meaning defined at sense 1

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Statistics for buyout

Last Updated

6 Feb 2019

Look-up Popularity

Time Traveler for buyout

The first known use of buyout was in 1598

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More Definitions for buyout

buyout

noun

Financial Definition of buyout

What It Is

A buyout is the purchase of at least 51% of a company. Under a buyout, the previous ownership loses control over the company in exchange for compensation.

How It Works

The buyout process usually begins when an interested purchaser or group of purchasers makes a formal buyout offer to a company's board of directors, who are the representatives of the company's shareholders. Negotiations and/or a tender offer ensue, and the board of directors eventually either recommends that the shareholders sell their shares to the purchaser or discourages the shareholders from doing so. Company managers and directors do not always welcome buyout offers, but because the shareholders ultimately decide whether to sell the company, people consider some buyouts hostile and others friendly. Regardless, the purchaser usually pays a premium for shares that give it controlling interest in a company.

Companies, private individuals, private equity firms, pension funds, lenders, and other institutions usually conduct or supply the money for buyout transactions. Companies that specialize in buyouts (buyout firms) exist solely to fund and facilitate buyouts, and they may act alone or together on a deal. They usually get their money from institutional investors, wealthy individuals, or loans.

Buyout firms usually seek out and purchase underperforming or undervalued companies in order to "fix" them and sell them or take them public many years later. When it sells one of its companies, the buyout firm takes a commission, which it passes on to its investors. Buyout firms are also often involved in management buyouts, which are buyouts conducted by the management of the company being purchased, and they often play key roles in leveraged buyouts, which are buyouts that are funded with borrowed money.

Why It Matters

Buyouts occur for several reasons. Some occur because the purchaser believes a company's assets are undervalued and can be resold for a profit. Others occur because the purchaser believes it will receive financial and strategic benefits from the buyout such as higher revenues, easier entry into new markets, less competition, or improved operational efficiency. Ultimately, nearly all buyouts occur because the purchaser believes it can provide more value to a company's shareholders than the company's current management can.

Source: Investing Answers

buyout

noun

English Language Learners Definition of buyout

: the act of gaining control of a company by buying the parts of it you do not own

buyout

noun
buy·​out | \ ˈbī-ˌau̇t \

Legal Definition of buyout

 (Entry 1 of 2)

: an act or instance of buying out

buy out

transitive verb

Legal Definition of buy out (Entry 2 of 2)

1 : to purchase the share or interest of
2 : to purchase the entire tangible and intangible assets of (a business)

More from Merriam-Webster on buyout

Rhyming Dictionary: Words that rhyme with buyout

Nglish: Translation of buyout for Spanish Speakers

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