DSW is going to merge with its largest shareholder, Retail Ventures, in a transaction that will make Retail Ventures a wholly owned subsidiary of DSW. The transaction will be done in a tax-free exchange of shares at an exchange ratio of 0.435 DSW shares per each Retail Ventures share. The benefits to the two American retail companies include the elimination of the complexity and public company expenses for Retail Ventures which, like DSW, is a listed company whose only operating business is its 62 percent stake in DSW. Shareholders of Retail Ventures will own a stake in DSW, which generates significant revenues and is debt-free, while DSW will have fewer diluted shares outstanding. In addition, the deal leaves open the potential to utilize about $350 million of federal net operating losses and additional tax credits to offset DSW's taxable income, which are expected to generate significant cash tax savings over the next several years.