What are the potential tax implications for shareholders resulting from the stock‑for‑stock merger?

Tax implications for shareholders

In a stock‑for‑stock merger the tax treatment hinges on whether the transaction qualifies as a tax‑free reorganization under § 368(a) of the Internal Revenue Code. If the CMB.TECH‑Golden Ocean deal is structured as a statutory merger (or “stock swap” that meets the continuity‑of‑interest and continuity‑of‑business‑enterprise tests), shareholders generally receive the new Golden Ocean shares without recognizing a capital gain at the exchange date. The basis of the original CMB.TECH shares carries over to the newly‑issued Golden Ocean shares in proportion to the exchange ratio, and the holding period is tacked on. Consequently, any gain (or loss) is deferred until the shareholder later sells the Golden Ocean stock.

If the merger does not meet the statutory‑reorganization criteria—e.g., if cash is also paid, the exchange ratio is deemed “substantially disproportionate,” or the transaction is treated as a taxable exchange—shareholders must recognize capital gains (or losses) immediately on the fair‑market value of the Golden Ocean shares received, less the basis of the CMB.TECH shares surrendered. For U.S. investors, the gain would be taxed at short‑ or long‑term capital‑gain rates depending on their holding period; non‑U.S. investors should consider local withholding rules and any treaty relief.

Trading and actionable implications

• Pre‑merger positioning: If the merger is confirmed as a tax‑free reorganization, the market will likely price in only the equity‑swap premium/discount, not a tax drag, making the spread between CMB.TECH and Golden Ocean shares a key arbitrage indicator. Look for tight bid‑ask spreads and low implied volatility on the “exchange‑ratio” spread; a widening spread could signal market skepticism about the tax‑free status.

• Post‑announcement risk: Should regulators or tax authorities raise concerns about the transaction’s tax‑free qualification, the spread could widen sharply, presenting a short‑term sell‑the‑news opportunity on Golden Ocean shares (or a hedge via options). Conversely, confirmation of a clean tax‑free swap would support a long‑side on Golden Ocean and a short‑side on CMB.TECH to capture the merger spread.

• Portfolio impact: For long‑term holders, defer‑tax treatment preserves after‑tax returns, but investors must track the new basis and holding period for future disposition planning. Consider the post‑merger dividend yield and liquidity of Golden Ocean shares, as changes may affect total‑return expectations.

In summary, assuming the merger qualifies as a tax‑free reorganization, shareholders can defer capital‑gain taxes, and traders should focus on the merger spread dynamics, implied ratios, and any regulatory commentary that could reclassify the swap as taxable. Adjust positions accordingly to capture the arbitrage while monitoring tax‐status disclosures.