spinoff


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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.

spinoff

The distribution to stockholders of the stock of a subsidiary held by a parent company. Usually the distribution is not taxable to the stockholders until the new shares have been sold. Compare splitoff. See also partial spinoff.
References in periodicals archive ?
As of late, other details about the "Black-ish" spinoff are still being finalized.
Porrello said he doesn't believe the spinoff of Travelers or the possible spinoff of Employers Re portend a move away from convergence.
In its fundamentals, a spinoff is set up as a standalone business with ownership given to the parent's existing shareholders through a distribution of common stock in the new business.
The minimum "bullet-proof" asset transfer is the amount a financially sound insurance company would charge to annuitize the spinoff benefits, because an annuity purchase would be necessary if the plan were to terminate.
In any spinoff involving receipt of property other than stock, careful planning is required to achieve the desired tax treatment - usually, corporate shareholders want dividend treatment and individual shareholders desire capital gains treatment.