Under the revised agreement, the bank acquired only 9% of Max Life Insurance`s equity and Axis` companies acquired another 3% of Max Life`s share capital. In addition, Axis units are entitled to acquire an additional 7% interest in Max Life in one or more tranches. Currently, MFS holds a 72.5% interest in Max Life and MSI with 25.5% in the life insurance company. Once this share exchange agreement is concluded, MFS would move closer to the fruiting of its agreement with the private lender Axis Bank. A share exchange merger is likely to lead to some governance and post-integration problems. From a corporate governance perspective, companies may be required to negotiate the composition of the board of directors of the merged company to include certain former directors of the merged company, the extent of dilution of the participation of the existing shareholders of the merged company, their veto rights and their ability to advance management decisions. All of these concerns must be weighed in the context of a share merger related to a share sale or asset transaction, as financing is available at necessarily low interest rates. Indian tax law provides for an exemption from capital gains tax for the shareholders of the merged entity: the transaction involves the exchange of Mitsui Sumitomo`s 20.6 per cent stake in Max Life Insurance with 21.9 per cent in MFS, which will result in MFS`s participation of more than 93% in the life insurance company. MFS will issue and distribute 75.4 million shares, or 21.87 percent of the capital paid to Mitsui Sumitomo, according to the agreement. Max Financial Services (MFS), the parent company of Max Life Insurance, has been granted permission by the Insurance Regulatory and Development Authority of India (Irdai) to exchange Mitsui Sumitomo`s interest in Max Life Insurance with shares in the company, thereby consolidating its stake in the life insurance division. The valuation of these share exchange transactions and the subsequent determination of the swap ratio are essential aspects of these transactions.