Demutualization

(redirected from Demutualized)
Also found in: Dictionary.
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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
It is a demutualized exchange and the shareholding is completely institution based.
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.
Seventeen mutual insurance companies have demutualized since 1986 with the largest, by far, occurring this year.
A demutualized stock exchange will be in a better position to attract international strategic partners and good quality issuers.
The listing will come as Japan's second-largest life insurer is demutualized into a stock company.
Our results suggest that there is more "money left on the table" for demutualized insurers than for non-demutualized insurers.
Two companies have securitized the embedded value associated with "closed blocks" formed when the companies demutualized. Closed blocks are established to protect the dividends on participating individual life policies.
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.
The insurer, formerly a mutual company, demutualized and became a joint stock firm in April 2004 and has been seeking to go public during the current business year through March 2008.