de-merger


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De-Merger

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.

de-merger

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 ?
Consensus Commercial Management Limited focuses on contract transformation, delivering services such as supplier contract reviews, client contract negotiations, key contract transformations, interim contract management, mergers, acquisitions and de-merger contract reviews.
Archroma Pakistan Ltd ((Formerly Clariant Pakistan Ltd) was incorporated in 1996 as a result of the de-merger of chemical division of former Sandoz (Pakistan) Limited and is listed on the Karachi Stock Exchange.
Post de-merger, the transmission line business will be made a separate subsidiary.
The de-merger resulted in the transfer of all fertilizer assets and liabilities to the Company with its current status as a wholly owned subsidiary of Engro Corporation Limited.
Spirit Pub Company, which has 1,300 pubs following its de-merger from Punch Taverns last summer, said like-for-like sales at its managed estate grew 3.7% in the 12 weeks to May 26.
Spirit Pub Company, which has 1,300 pubs following its de-merger from Punch Taverns last summer, said its managed estate continued to outperform the market after like-for-like sales improved 5.6% in the six months to March 3.
Under the terms of the proposal, the company would retain direct majority control of the paints business by separating it into a new legal entity called AkzoNobel Pakistan Limited through a de-merger process approved by the shareholders of ICI Pakistan and sanctioned by the Pakistani courts.
AkzoNobel would retain direct majority control of the paints business by separating it into a new legal entity--AkzoNobel Pakistan Limited--through a de-merger process approved by the Pakistani courts.
"We believe a de-merger and a move to two focused divisions in our leased business will provide a stronger future for our pubs."
Mr Nolan was appointed Managing Director of Elementos Limited in September 2009 following his role as Corporate Development Manager for Orocobre Limited, where he was primarily responsible for facilitating the de-merger of Orocobre's copper and gold assets into Elementos Limited.
Employees have had a challenging 18 months that have included a de-merger from its previous sister company SCM Pharma, the sale of the business to new owners and the external pressures of the recession.
Operating costs increased to NOK6.9m from NOK4.6m due to the increased activity following the de-merger from Norwegian pharma company Photocure ASA (OSL: PHO) in 2008.