Demerger

A demerger separates an operation from a group so it can operate or be owned more independently. In a common spin-off, existing shareholders receive shares in the separated business, rather than the parent receiving a cash sale price; precise arrangements vary. Financial evaluation considers stand-alone prospects, retained ownership, lost synergies, separation costs and tax or regulatory requirements. The transaction should be compared with alternatives such as a sale or continued ownership using consistent values and cash flows.