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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 ?
Audi AG, a subsidiary of Volkswagen AG (Xetra: VW), has named Oliver Hoffmann as its head of technical development at its Audi Sport performance car offshoot, effective October 1, 2017.
Kabul [Afghanistan], Sep 26 ( ANI ): At least eight terrorists of the Islamic State of Iraq and Syria (ISIS) group's offshoot, ISIS Khorsan have been killed in an airstrike by the United States forces in eastern Nangarhar province of Afghanistan.
The offshoot have nine stores and 17 concessions in department store Myer, and have annual sales of about PS52million.
The contract is for the development of project documentation for reconstruction of the pipeline Zdzieszowice-Wroclaw-shore section Zdzieszowice Opole, an offshoot of the SG and SG Zyrowa Rozwadza.
The gig is an offshoot of the world-famous EDM show Tomorrowland (founded in 2005), which plays host to over 180,000 audience members in Belgium every year.
It is regarded as the hardline offshoot of the PKK, rejecting any attempt at ceasefire talks with the Turkish state.
He told reporters at a news conference that authorities have been trying to confirm the authenticity of a still photo being circulated on Twitter by social media accounts supportive of Egyptian offshoot of terrorist ISIS, that showed a headless body.
And according to Redcar musician and co-organiser of the Redcar offshoot, Bob Fortune, it went so well, the experiment may be repeated.
The militant group Hamas is an offshoot in the Palestinian territories.
Neo-Salafis militancy is being spear-headed by al-Qaeda, an offshoot of the banned Egyptian Muslim Brotherhood (EMB) which has branches in various parts of the Muslim world including Europe, and Hizb ut-Tahrir (HuT) which has branches in the other parts of this world including Europe and the GME.
THE Offshoot is making one of its only UK appearances at The Cluny on Wednesday, November 21, at 8.
An offshoot of that company leases back the "Crown" buildings to the country at an astronomical price but they do not pay tax in the UK.