A stock-for-stock merger, also called an all-share or all-stock merger, is a combination of two companies in which shareholders of the target receive shares of the acquirer as payment. The terms are expressed as an exchange ratio, a form of entitlement ratio: for instance, 0.8 acquirer shares for each target share. With a fixed ratio, the value target holders receive moves with the acquirer's share price until completion. It is one of the standard structures in mergers and acquisitions, alongside cash deals and the cash-and-stock merger.
In many countries, holders who receive only shares can defer tax on their gain until they sell. For custodians the completed deal is a mandatory corporate action: target shares are removed, acquirer shares are credited at the ratio, and fractions follow the stated fractional share treatment. The steps are described under merger consideration processing.