Share Swapping

Share swapping is a financial arrangement where one company's shares are exchanged for another company's shares, usually during mergers or acquisitions. Instead of paying cash, the acquiring company offers its own shares to the shareholders of the target company. This allows shareholders to maintain an ownership stake in the combined entity. The swap ratio determines how many shares of the acquiring company each shareholder receives for their shares from the target company. Share swapping can be a strategic way to facilitate transactions while preserving cash and aligning interests between the companies involved.