Demutualization

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Related to Demutualized: Demutualisation

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 ?
As a demutualized entity, the ownership of the NSE is separate from the right to be a trading participant, a stockbroker or investment bank, or members of the Kenyan investing public can now own shares in the NSE.
Demutualization is a well-established global trend and almost all stock exchanges worldwide operate in a demutualized set-up.
After converting to the stock organizational form, demutualized firms attain levels of efficiency not achieved when they were employing the mutual production technology.
Best, demutualized insurers cut their workforce by 40 percent, on average, after restructuring.
This is only the second time we have had to adjust the dividend scale since we demutualized, which speaks to the underlying strength of the business.
A demutualized stock exchange will be in a better position to attract international strategic partners and good quality issuers.
It would also provide provisions relating to ownership and voting rights, provision relating to governance structure of the demutualized stock exchange to ensure segregation of its regulatory function from its commercial function, enabling provision for self-listing of demutualized stock exchange and empowering the SECP to supervise a demutualized stock exchange as a listed company on its own exchange.
Our results suggest that there is more "money left on the table" for demutualized insurers than for non-demutualized insurers.
TSE, which demutualized itself to become a stock company in November 2001, will sell shares to the public only in Japan through the three co-lead managers.
Two companies have securitized the embedded value associated with "closed blocks" formed when the companies demutualized.
As part of the transaction, the former Mutual Service Casualty Insurance Company was demutualized and converted to a stock company and given the current name.
The results using the value-added approach indicate that demutualized life insurers improve their efficiency before demutualization.