Share exchanges are often used to create holding company arrangements.

Question

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Share exchanges can be used to merge companies or create holding company structures. When two or more companies merge, they may choose to form a new company, where the shares of each individual company are exchanged for shares in the new entity. This can also be done to create a holding company, where the shares of each company are owned by the holding company, giving it control over its subsidiaries.

Share Exchanges Are Often Used to Create Holding Company Arrangements