Demutualization

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Demutualization

Refers to the process that has come about as the result of many not-for-profit exchanges (mutual companies owned by groups of members) converting to for-profit and then shareholder companies in order to go public.

Demutualization

The process by which a mutual company becomes a publicly-traded company. A mutual company is a company owned by its members or users for the benefit of those members or users. In demutualization, the members give up their rights and receive shares in the company in return, which the (now former) members may then sell. Demutualization happens most often when a stock exchange owned by its members goes public.

As an aside, a mutual company should not be confused with a mutual fund.
References in periodicals archive ?
Report 369 Response to submissions on CP 210 Demutualisation approval procedure rules: Minimum member participation requirement (REP 369) sets out the key issues that arose out of submissions to Consultation Paper 210 Demutualisation approval procedure rules: Minimum member participation requirement (CP 210).
No one individual should in my opinion feel a need to apologise for their having received demutualisation bonuses since, where they are paid out at all, then everyone is as morally entitled to receive one as anyone else.
In April, Standard Life asked members to back demutualisation to help the company raise capital and realise their interest.
At that point new Standard members were asked to sign a waiver ruling them out of any windfall should the company pursue a demutualisation.
Mr Burgess said it appeared demutualisation could take place without immediate stock market flotation or trade sale, so members would receive a shareholding in an unquoted company.
Throughout both Ireland and the United Kingdom, management of Standard Life campaigned against demutualisation in voting that went on up to last Friday, with the result set for Tuesday.
Mortgage shortfalls, possibly affecting as many as 530,000 Standard Life endowment policies, could be made up by demutualisation gains.
The rating actions follow the successful completion of the demutualisation process.
People can validate their membership either by filling in a form which was sent to members in October or by voting on the demutualisation.
Standard Life, which employs 60 staff in Newcastle's Cross House, warned that demutualisation would damage the company and vowed to fight the move if the petition was valid and sparks a special general meeting and a vote.
David Stonebanks, 64, handed in a petition from nearly 2000 members calling for a vote on demutualisation.
His comments, at Standard Life's annual general meeting at the Edinburgh International Conference Centre, came amid snowballing demands from investors for demutualisation.