What is spin-off in strategic management?
A spinoff is the creation of an independent company through the sale or distribution of new shares of an existing business or division of a parent company. The spun-off companies are expected to be worth more as independent entities than as parts of a larger business.
What is a spin-off example?
Spin-offs occur when the equity owners of the parent company receive equity stakes in the newly spun off company. For example, when Agilent Technologies was spun off from Hewlett-Packard in 1999, the stock holders of HP received Agilent stock.
What does it mean for a company to spin-off?
In a “spin-off,” a parent company distributes shares of a subsidiary to the parent company’s shareholders so that the subsidiary becomes a separate, independent company. The shares are usually distributed on a pro rata basis.
What is spin-off in simple words?
Definition of spin-off
(Entry 1 of 2) 1 : the distribution by a business to its stockholders of particular assets and especially of stock of another company also : the new company created by such a distribution.
What’s another word for spin-off?
In this page you can discover 9 synonyms, antonyms, idiomatic expressions, and related words for spinoff, like: byproduct, derivative, offshoot, descendant, outgrowth, kin, dreamworks, derivation and spin-off.
What are the advantages of spin-off?
Why does a company opt for Spin-off?
- Benefits of Focus.
- Due to Failure to sell a division.
- Reduced agency costs.
- Risk, Profitability, and Debt.
- Reduced Overheads.
- – No ownership retained.
- – Minority Ownership Retained.
- Increased cost.
What is another word for spin-off?
What is the difference between spin-off and split off?
A spin-off distributes shares of the new subsidiary to existing shareholders. A split-off offers shares in the new subsidiary to shareholders but they have to choose between the subsidiary and the parent company.
What are spin-off benefits?
A spin-off occurs when a company takes a division or piece of its business and creates an entirely new entity. You can sell a spin-off and receive the benefits in one lump sum or retain control in the company and reap the benefits and the expenses.
What is the opposite of spin off?
Antonyms for spin-off. origin, root, source.
Is spin off one word?
A noun or pronoun can be used between “spin” and “off.” Only two years after purchasing it, the company has decided to spin off its VR division. 3. noun Something created or derived from a larger or original thing. As a noun, the phrase is usually hyphenated or spelled as a single word.
How do spin offs create value?
The Spin on Spin-offs
In a pure spin-off, a company distributes 100% of its ownership interest in a unit as a stock dividend to existing shareholders. It’s a tax-free method of divestiture that usually helps both the parent and unit achieve better results as separate and more highly-valued entities.
What is a spin-off transaction?
Spin-Off Transaction means, any transaction in which assets of the Company are transferred or sold to a company or corporate entity in which the Shareholders hold equal stakes, pro-rata to their ownership of the Company.
Do spin offs create value?
Spinning off a business can create value and accelerate growth at a company and the spun-off entity, delivering solid, long-term returns for stakeholders.
How do you know if a spin-off will succeed?
Successful spin-offs tend to have a management team that comprises both insiders and outsiders. The insiders bring a detailed understanding of the company’s assets, capabilities, customers, competitors, and stakeholders. The outsiders provide new blood in support functions such as finance, legal, or administration.
What is another name for spin-off?
What is the synonym of spin-off?
synonyms for spin-off
adjunct. branch. by-product. derivative. descendant.
What is the difference between a spin-off and a split off?
Are spin-offs good for shareholders?
Are Spinoffs Good for Investors? They can be. As a new, smaller company, a spinoff can offer investors attractive potential for growth in share price as it produces solid financial results. Bear in mind that spinoff stock prices tend to be more volatile.
Is it spinoff or spin off?
A spin-off is an unexpected but useful or valuable result of an activity that was designed to achieve something else. The company put out a report on commercial spin-offs from its research.