What are the tax implications for shareholders in the stock‑for‑stock exchange?

Tax‐implications of a pure stock‑for‑stock merger

In a “stock‑for‑stock” exchange that qualifies as a tax‑free reorganization (most U.S.‑listed mergers of this type are structured as a “reorganization of type A” under IRS Code §368), shareholders typically do not recognize a taxable event at the time of the exchange. For U.S. shareholders the shares received from CMB.TECH will be treated as a continuation of the original basis in the Golden Ocean shares, and the original holding period carries forward. The key practical consequence is that any eventual gain (or loss) will be deferred until the shareholder disposes of the new CMB.TECH shares, at which point the usual capital‑gain tax rules apply (short‑ versus long‑term rates depending on the holding period). If a small cash component is included in the deal (a “cash‑in‑lieu” or “partial cash” payment), that portion would be taxable in the year received, and the remaining share‑exchange portion would retain its tax‑free status.

Implications for non‑U.S. investors – Shareholders residing outside the U.S. (e.g., European or Bermuda‑based shareholders) are generally subject to their local tax regimes on any gains realized when they eventually sell the new shares. Because Bermuda has no corporate or capital‑gain tax, Bermudian shareholders will likely only face tax in the jurisdiction where they are tax‑resident. U.S. non‑resident shareholders may face U.S. withholding tax on any cash portion or on a deemed dividend, but a pure share swap should not trigger U.S. tax at the exchange date. Nonetheless, each jurisdiction’s treatment of “reorganizations” can differ; for example, certain EU member states may require a taxable event if the exchange is considered a “sale” rather than a “reorganization.”

Actionable trading view – Since the exchange is expected to be tax‑neutral, the primary driver of the share price will be fundamental synergies and market perception rather than tax drag. Investors can therefore treat the merger as a roll‑over: maintain exposure if they are comfortable with the combined entity’s prospects, or consider partial exits if they need to lock‑in a realized gain for tax‑planning purposes (e.g., before a change in tax law). If you hold a large, taxable position and the merger is confirmed, a prudent step is to re‑calculate your cost basis and monitor the post‑merger price to decide when to realize any gains, keeping in mind the holding‑period rules to qualify for long‑term capital‑gain rates. If any cash component is announced, model the tax impact on that cash portion and factor it into your net‑return expectations.