Value Exchange Ratio (M&A Glossary)

Summary

In a stock-for-stock acquisition, this is a ratio determining how many buyer shares each target share will be exchanged for. The value exchange ratio may be fixed from the outset and not subject to change despite any fluctuations in share prices between the purchase agreement’s signing and closing (a fixed value exchange ratio, or a fixed ratio), or it may be floating, if based on a mutually agreed adjustment formula set in the purchase agreement (floating value exchange ratio, or floating ratio).