Topic summary
Demerge
Extracted from the Wikipedia article Demerger.
Types and purpose
A demerger can take place through a spin-off, where the holding company gains equity in the new corporation that is the same as the loss of equity in the company that demerged. A split-off occurs when multiple new companies are formed from the original business. A partial demerger occurs when the holding company retains a reduced stake in the new company created. Demergers can also occur as a result of liquidating a company and transferring assets to new companies. Divestments differ from demergers, as they involve selling aspects of an existing business to new owners, in some instances to reverse a previous merger.