What is a share merger?

A share merger is a form of share exchange in which a natural or legal person transfers their shares in one company (party A) to another company (party B) and in exchange receives shares in the latter company (B).

Legally, this involves a transfer of shares, followed by an issue (issuance) of new shares. The consideration generally consists exclusively of shares, without a cash payment.

An alternative form is for both A and B to transfer their shares to a jointly established holding company. This term is relevant in the context of business mergers and restructurings.