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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 ?
The offshoot design and construction will be financed by Transneft by means of the long-term tariff to be paid by Rosneft under the Agreement.
The Indian offshoot has a domestic operator's licence and is not allowed to fly overseas from India.
Yemeni security services have repeatedly blamed militants of the Yemen-based al-Qaeda offshoot for a series of assassination attacks, mostly in the country's Southern regions.
And according to Redcar musician and co-organiser of the Redcar offshoot, Bob Fortune, it went so well, the experiment may be repeated.
In Jordan, reformists in the group's offshoot, led by Ruhail Gharaybeh and Nabil Koufahi, call for a constitutional monarchy in the kingdom and urge the group to join ranks with other groups in one comprehensive political reform program," he wrote in AL HAYAT.
With Hamas being EMB's fighting offshoot and now ruling the Gaza Strip, HuT is increasingly more active in the multi-ethnic and impoverished Fergana Valley, which spills across the borders of Uzbekistan, Tadjikistan, and Kyrgyzstan.
Brought together by bassist Simon Fell, The Offshoot is a spin-off from a BBC commission for the Huddersfield Contemporary Music Festival.
What they found among members of the Fundamentalist Church of Jesus Christ of Latter Day Saints--an offshoot of Mormonism--was a culture of "widespread sexual abuse and child exploitation" in which "girls as young as 13 are forced into marriage.
Rare Bar & Grill, 228 Bleecker Street at Sixth Avenue, in the West Village is an offshoot of the original Murray Hill burger joint located inside the Shelburne Hotel, and has recreated the tavern decor.
The DLA was an offshoot of my dissertation 'The Agona Duakwa Project: A Case Study,' and it was later founded as a grassroots effort to bring computer and traditional literacy together for the people of Agona Duakwa and the Central Region" says Dr.
IN NOVEMBER the nonprofit group One Laptop per Child, an offshoot of MIT's Media Laboratory, unveiled a prototype of a $100 laptop meant for underprivileged kids in remote parts of the developing world.
This is why her work went well beyond the rather narrow confines of the Poesia Visiva (visual poetry) movement, which was particularly active in the '60s and '70s in Florence, where she lived, and which could be defined as an offshoot of Conceptual art, often employed in Dadaist fashion, with certain ideological/political overtones.