When companies are acquired for billions, how does the payment transaction occur?

There a couple of ways this can play out.

(a) Cash: Assuming the purchase is an all-cash buy out (either buying the shares from a publicly-traded company or privately), it is simply a matter or escrowing your payment with a bank, a team of lawyers and auditors would make sure the transfer of shares occurs and then the bank releases the payment to the appropriated accounts.

The fact that it is in billions just involves more people. Remove the word ‘billion’ and assume it was a $100,000 transaction, the method to execute would inherently not be too different.

(b) Shares swap: In this case, shares of one company (that is acquiring) is valuing the shares of the other company (that is being acquired). So let’s assume CompanyX is being bought out, by CompanyABC. The share value of CompanyX might be equal to say 1/2 a share of CompanyABC. So on a certain transaction date, all shareholders of CompanyX would have their shares converted to CompanyABC’s shares at half the quantity. So if I had 10,000 CompanyX shares, now I would have 5,000 CompanyABC shares.

This is done by involving the central shares registry. This is literally a swap, and the legal shares of CompanyX cease to be independent shares and are converted to shares of CompanyXYZ after the switching date.

(c) Shares and Cash: In the third scenario it is a mix of both (a) and (b). So some amount is appropriated as cash and the remaining as stock-swap, so in essence, what is described in (a) and (b) is taking place simultaneously.

Just because the amounts are in Billions of dollars, it is as far as banks are concerned, it is nothing more than an RTGS settlement that is happening (in most cases).