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A situation in which a company sells one or more of its subsidiaries. Shareholders in the original company are usually given the same proportion of shares in the newly independent company. See also: Spin-off, Divestiture.


the break-up of a company, often originally formed through a MERGER, into two (or more) separate companies. This is most easily achieved when the original businesses comprising the merger have continued to be run as separate divisions of the enlarged group. In this case, for example, the A-B company could be split into separate quoted companies, A and B, with the company's existing shareholders being given shares in both companies. Thus, unlike a DIVESTMENT (the sale of a division to outside interests) or a MANAGEMENT BUY-OUT (the sale of a division to its existing management), initially at least the companies continue to be owned by their existing shareholders.

A de-merger may occur because the merged company has failed to perform up to expectations because of internal conflicts of management, or result from a rethink of the company's BUSINESS STRATEGY favouring a concentration on ‘core’ businesses.

References in periodicals archive ?
Vodafone does not properly address these points and continues to mislead shareholders by pretending that the disadvantages Mannesmann would suffer from a de-merger of Orange can be determined in accordance with German law.
MPI's Board of Directors unanimously recommends that shareholders accept the LionOre offer and have indicated that they intend to accept the offer with respect to their own shareholdings, in both cases in the absence of a superior offer emerging and upon completion of the de-merger of the gold assets.
Regulator Ofwat has been carrying out a review into the water company's finances, following its de-merger from parent Suez, and admission to the stock market last May.
The credentials of this company, of North American origin but now part of Carillion, following the Tarmac de-merger, appear strong.
The de-merger of Centrica from BG, which took place on 17 February, 1997, has radically altered the group's business position.
International Power was created from the de-merger of National Power, and its shares began trading independently on the London Stock Exchange and as ADRs on the New York Stock Exchange on 2 October 2000.
Sara Woffenden, lead partner for Bevan Ashford's Birmingham office, said: 'Bevan Ashford has grown its presence in the city dramatically and the Birmingham office will continue to expand following the de-merger of the Bristol, Birmingham and London offices from the West Country practice later this year.
By their nature, forward-looking statements involve certain risks and uncertainties including, but not limited to, the ability to complete transactions with investors, the ultimate success of the de-merger process, product and market acceptance risks, the impact of competitive pricing, product development, commercialization and technological difficulties and other risks detailed in the Company's filings with the Securities and Exchange Commission.
He is chairman of Woolworths, poised to lead its de-merger from Kingfisher.
The company continues to focus on applying rigorous operational disciplines to its core business in order to improve cash flow and profitability following its de-merger from Kingfisher plc in 2001.
AMP, previously Australian Mutual Provident, had set this Friday as the date for its formal explanatory memorandum of the proposed de-merger.