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Yes this happens. Usually the difference between the two classes relates to voting rights. For simplicity purposes, a company may convert its A shares to B shares so there is only one class of shares.
The conversion may be done at the equivalent voting %. But there are a lot of different scenarios that could come up, like meeting certain conversion criteria which could trigger a conversion event. You may need to be more specific for us to explain how it may apply to the situation you have in mind.
Hi WhaleofWallStreet Thanks for the comment. I am aware of why they do it, but just wanted to find a company with a history of merging its different share classes into one and take a look at it. By any chance, do you have any name that comes to mind?
Here's a throwback for you...
http://www.independent.co.uk/news/business/wh-smith-to-merge-two-share-…
"WH SMITH, the retailer and newspaper distributer, yesterday broke with a 40-year tradition when it announced that it was to merge its two classes of shares. The group's B shares date from 1949, when it was floated as a public company after the death of its founder Lord Hamilton. They have a nominal value of 10p, a fifth of the 'A' shares but equal voting rights, and were designed to give the family protection after the company went public. They receive only a fifth of the A share dividend, however.
Under proposals that have to be agreed with shareholders, five B shares will be merged to create an A share. As compensation for the loss of voting rights, holders will be given 15 new shares for every 100 B shares held before consolidation."
Hmm... I can't recall who it was but there was definitely a Canadian company that tried this a few year back. Maybe Telus? I think it was eventually voted down though.
You're right. They used to have a dual class structure. Also, Magna International in Canada. Thanks for the input!
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