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Spin-off

Spin-off

A spin-off means that part of a company, often a subsidiary, becomes an independent company of its own.

What is a spin-off?

A spin-off (Swedish: avknoppning) means that part of a company, often a subsidiary, becomes an independent company. Usually the shares in the new company are distributed to the shareholders of the parent company, and the company can then be listed separately on a marketplace.

 

A spin-off and the ownership picture

After a spin-off, shareholders gain direct ownership of an additional company. The new company needs its own share ledger in which the new owners are entered. A spin-off can be carried out in several ways, for example through a dividend of subsidiary shares or through a demerger.

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Related terms

Subsidiary

A subsidiary is a company controlled by another company, the parent company.

Parent company

A parent company is a company that owns and controls one or more subsidiaries.

Demerger

A demerger means a limited company's assets and liabilities are transferred to one or more other companies.

Dividend

A dividend is when a limited company distributes part of its profit to its shareholders.