A stock deal is when an acquirer purchases all equity ownership of a firm to purchase the entire company. This is by far the most common kind of deal.
An asset deal is when the acquirer purchases the majority of the target’s assets and does. The target firm uses the cash proceeds from sale to pay off shareholders to prepare for acquisition. All asset deals are friendly and they do not necessarily involve the entire company. Most importantly, an asset deal does not assume the target’s liabilities which can be useful if the target has contingent liabilities such as lawsuits or has a bad brand reputation.