Stock For Stock Merger Agreement

October 9th, 2021

There are different ways for an acquiring company to pay for the assets it receives for a merger or acquisition. The acquirer can pay in cash for all the shares of the target company and pay each shareholder a certain amount for each share. Alternatively, the acquirer may make its own shares available to the shareholders of the target company based on a certain conversion ratio. Thus, for each share of the target company held by a shareholder, the shareholder receives X of the shares of the company repurchased. Acquisitions can be made with a mix of cash and shares or with all stock remuneration, which is called share-for-share merger. Stock-by-stock fusion is attractive to businesses because it is efficient and less complex than a traditional cash-for-stock merger.

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