Demerger

Demerger

Demerger is a form of corporate restructuring in which the an entity's business operations are segregated into one or more components.[1] It is the converse of a merger or acquisition.

A demerger can take place through a spin out by distributed or transferring the shares in a subsidiary holding the business to company shareholders carrying out the demerger. The demerger can also occur by transferring the relevant business to a new company or business to which then that company's shareholders are issued shares of.[1]

Demergers can be undertaken for various business and non-business reasons, such as government intervention, by way of anti-trust law, or through decartelization.[2]

References

  1. ^ a b Bryer, Lanning G. (2002). "Intellectual property assets in mergers and acquisitions". John Wiley and Sons. pp. 12.2–12.3. ISBN 9780471414377. 
  2. ^ Krishna, K.L.; Uma Kapila (2009). Readings in Indian Agriculture and Industry. Academic Foundation. p. 599. ISBN 9788171887347. 
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