Thursday, October 2, 2014

Demerger

Demerger is a form of corporate restructuring in which an organization’s business operations are segregated into 1 or more components. It is opposite of a merger or acquisition.

A demerger can take place through a spin out by transferring or distributed the shares in a subsidiary holding the business to company shareholders carrying out the demerger. The demerger can also take place by transferring the relevant business to a new company or business to which then that company's shareholders are issued shares of.

Demergers can be taken place for various business and non-business reasons, such as government intervention, by way of anti-trust law, or through decartelization. 

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