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A company can create an independent company from an existing part of the company by selling or distributing new shares in the so-called spin-off.


A situation in which a company offers stock in one of its wholly-owned subsidiaries or dependent divisions such that subsidiary or division becomes an independent company. The parent company may or may not maintain a portion of ownership in the newly spun-off company. A company may conduct a spin-off for any number of reasons. For example, it may wish to divest itself of one industry so it can expand into another. It may also simply wish to profit from the sale of the subsidiary. A spin off should not be confused with a split off.


In a spin-off, a company sets up one of its existing subsidiaries or divisions as a separate company.

Shareholders of the parent company receive stock in the new company based on an evaluation established for the new entity. In addition, they continue to hold stock in the parent company.

The motives for spin-offs vary. A company may want to refocus its core businesses, shedding those that it sees as unrelated. Or it may want to set up a company to capitalize on investor interest.

In other cases, a corporation may face regulatory hurdles in expanding its business and spin off a unit to be in compliance. Sometimes, a group of employees will assume control of the new entity through a buyout, an employee stock ownership plan (ESOP), or as the result of negotiation.

References in periodicals archive ?
The Boston Community Partners program, an off-shoot of NPCA's Cultural Diversity Program, has initiated a number of exciting projects.
Its Softbank Technology Ventures off-shoot is seeking outside investors for the funds, which will have capital of around $1bn and target both start-ups and listed companies.
Its an off-shoot of the phenomenally successful Ocean Colour Scene-backed Song Writers Cafe in Birminghams city centre.
It is an off-shoot of the international conspiracy aimed at converting Pakistan's economy into consumers market for the greater good of the developed countries", says a press release.
So Gordon's brilliant intellectual commentary should substantially refocus the literature on welfare programs and policy that is such an important off-shoot of women's history.
Founded in 1984 by Brian Hill, Aritzia is an off-shoot of Hill's of Kerrisdale, a long-established Vancouver department store owned and operated by the Hill family.
The final was seen on CBBC last night and saw the off-shoot of Coventry's Kombat Breakers up against dance crews from Essex and the Wirral.
The 'Two and a Half Men' actor, who was introduced to the mystical faith, an off-shoot of Judaism, by wife Demi Moore six years ago, is fascinated by his studies into the religion and thinks attending weekly meetings helps him in life.
Its off-shoot Al Shabaab began with the aim of expelling Ethiopian soldiers from the country.
Children of Bodom and Black Sabbath off-shoot Heaven and Hell.
THE richly deserved title of North East Company of the Year was handed last night to a firm that started life as an off-shoot of a great British institution which today is no more.
Ben gave students three separate displays of bike trials, a mountain biking off-shoot where competitors have to navigate obstacle courses.