Exchange Ratio

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Exchange Ratio

The number of new shares in an acquiring firm that are given for each outstanding share of an acquired firm.

Exchange Ratio

In mergers and acquisitions, the number of shares an acquiring firm distributes for each validly rendered share of the acquired company. Each exchange ratio is calculated in accordance to the merger or acquisition agreement. Factors considered in determining the ratio are the relative value of each company prior to the closing of the merger or acquisition, any potential tax advantages for both parties, and applicable regulations.
References in periodicals archive ?
Affected unitholders will receive a number of units of the applicable Continuing Fund determined based on an exchange ratio established as of the close of trading on the business day immediately preceding the Effective Date.
pilots, working with a pronounced technological edge, could achieve no better than an exchange ratio of 2.6 to I over North Vietnamese fighters.
When making the initial announcement, the buyer said the tie-up will be implemented using maximum and minimum exchange ratios of 1.707 and 1.650, respectively, depending on the the volume-weighted average trading price of Kite Realty's common stock for the ten consecutive business days ending on the third trading day before the target's investor meeting.