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Spin-Off |
Description of Spin-Off. Explanation. |
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Definition Spin-Off. Description.
A Spin-Off is a form of corporate divestiture, whereby a subsidiary, division or strategic business unit becomes an independent company. Normally, shares in the new organizational entity are distributed in the form of a special stock dividend to the shareholders of the parent company on a pro rata basis. However see Leveraged Buy-Out.
A frequent reason for considering a Spin-Off is that a product developed by the R&D department that does not fit in the Core Competence of the corporation, or to streamline the parent organization. A Spin-Off can also be advantageous from a strategic point of view in that two new companies can each focus on their core business. Also, from a financial point of view, the two firms may be worth more than the sum of them. Forum Comment on this PageCompare with: Leveraged Buy-Out | Management Buy-Out | Divestiture | Exit Strategy | Parenting Advantage | Parenting Styles | Growth Phases | Joint Venture | Special Purpose Vehicle | Strategic Alliance | Synergy |
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End of description Spin-Off. An explanation. |
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