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What is the impact of mergers and spin offs on shares?

The impact of mergers and spin-offs depends on the individual circumstance and on the swap ratio. A swap ratio is an exchange rate of the shares of the companies that would undergo a merger. This is calculated by the valuation of various assets and liabilities of the merging companies.

The swap ratio determines the control that each group of shareholders of the companies shall have over the combined firm. It is an indicator of relative values of financial and strategic results of the company.