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Spin off

• A form of divestiture in which an operating unit becomes an independent company by issuing shares in it on a pro rata basis to the parent company's shareholders.

• Is a company or division which is separated from the parent. Here, the parent's shareholders receive pro rata ownership shares in the newly free standing organization.

• 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.

 
 Embedded terms in definition
 Basis
Divestiture
Operating unit
Shareholders
Shares
Unit
 
 Related Terms
 Blow off top
Off balance sheet activities obsas
Off balance sheet financing
Off the run
Off the run issue
Risk/return trade off

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