Template:M summ Equity Derivatives 12.1(j)

When you are doing a merger or acquisition you can do it by “share swap” — the acquiror gives target shareholders a (small) portion of the acquiror’s share capital in return for a (large or total) portion of the target’s share capital, and this way the selling shareholders become shareholders in the acquiring company and, more importantly, the acquiror doesn’t have to spend or god forbid borrow any cash to make the acquisition, or you can do it by paying in cash (usually) or securities of some other corporation (unusually) or soem other valuable asset you found down the back of the sofa or cobbled up from the last three nights’ leftovers. In this case the selling shareholders are out of the game, no longer having any exposure to the sold company or its acquiror.

Or, of course, you could combine them, paying with some of your own shares and some cash (and/or stuff you found in the sofa).

A “share swap” in 2002 ISDA Equity Derivatives Definitions argot is “Share-for-Share”. Cash/jury rigged stuff you found in the sofa is Other Consideration, and a mixture of the two is “Combined Consideration”.