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Exchange of shares

A means of business combination which can take two forms. In form (a) the companies retain their separate identities, but exchange a quantity of shares so that each company holds shares in the other and normally some directors will sit on both boards. In form (b) two companies will merge, shares of one company being exchanged with or without a cash adjust­ment, for the whole of the issued share capital of the other.

Reference: The Penguin Dictionary of Economics, 3rd edt.