A stock swap is a transaction where an acquirer acquires shares of another company and, instead of paying cash for such acquisition, discharges consideration by issuance of its own shares. Business World has surveyed experts on the question as to whether a stock swap amounts to a “sale”. The response is as follows:
Yes : 33%
No : 10%
Maybe : 57%
A summary of the reasons for each answer has been set out in the survey (link provided above).
It appears that the answer “maybe” is probably more appropriate, as a lot would depend on the exact features of the transaction as well as the real intention between the parties. There can be no generalisation as to these matters, especially in a legal sense, as expressions such as “stocks swap”, “reverse merger”, etc. are not statutorily defined, but are rather terms that emanate from market practice.