Definition of the word buy out

The term "buy out" refers to a financial transaction in which one party agrees to acquire the ownership or interest of another party in an asset, business, or contract. The origins of the phrase can be traced back to the early 20th century, when it was commonly used in the context of buying out the equity or shares of a company's existing partners or shareholders either voluntarily or by forcing them out through a hostile takeover. The term "buy out" has since been applied more broadly to refer to any instance where one party purchases the assets or debts of another, such as in the context of mergers and acquisitions, debt repurchases, or the settlement of employee contracts, among other scenarios. The essential element of a buy-out transaction is the transfer of ownership or control from one party to another at a predetermined price or value, typically resolved through a legally binding agreement.