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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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.


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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
100 stores have opened their doors on Prince Street, a new off-shoot of SoHo, among them Ralph Lauren, Levi, and Simeon Morrison.
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As Davies tells us in the very first paragraph, he was the inaugural editor of Nature Genetics, an off-shoot of the prestigious British science journal Nature.
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This contribution to Renaissance art history concerns the painted decoration of the small library of the rather obscure Abbey at Praglia, an off-shoot of the better known Benedictine Cassinese house at S.
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* The Boston Community Partners program, an off-shoot of NPCA's Cultural Diversity Program, has initiated a number of exciting projects.
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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.
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