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Buyout vs Buyback in Stocks
Feature	Buyout	Buyback
Definition	Acquisition of a controlling interest or entire ownership of a company by another entity or group.	When a company repurchases its own shares from the open market or shareholders.
Purpose	To gain control, restructure, or merge operations.	To return surplus cash to shareholders, boost share price, or improve financial ratios.
Initiated By	External buyers (private equity firms, other companies, or management in case of MBO).	The company itself.
Impact on Ownership	Transfers ownership from current shareholders to the buyer.	Reduces number of outstanding shares, increasing ownership percentage of remaining shareholders.
Control	Leads to a change in control or ownership.	No change in control; company continues as is, often with fewer shareholders.
Effect on Shareholders	Shareholders may sell their stake entirely and exit.	Shareholders may choose to sell or hold; those who hold benefit from increased value per share.
Financial Structure	Often financed through debt (leveraged buyouts).	Financed through surplus cash or reserves.
Common in	Mergers, acquisitions, private equity deals.	Publicly listed companies managing capital structure.
Examples	Tata’s buyout of Jaguar Land Rover, Facebook acquiring Instagram.	Apple and Infosys regularly conducting share buybacks.
Share Status	Shares may be transferred to new owners or delisted.	Shares are cancelled or held as treasury stock.
Market Reaction	Often positive if seen as strategic; may trigger revaluation.	Usually boosts share price due to reduced supply and confidence signal.
Company Status	May become private or part of another firm post-buyout.	Remains the same entity but with altered share structure.
Regulatory Approval	Often requires regulatory and shareholder approval.	Requires board and sometimes shareholder approval.
Tax Implications	Can involve capital gains for selling shareholders.	May be taxed differently depending on jurisdiction (dividend vs capital gains).