Demerger is a form of corporate restructuring in which the an entity's business operations are segregated into one or more components. 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.
Demergers can be undertaken for various business and non-business reasons, such as government intervention, by way of anti-trust law, or through decartelization.
Corporate finance and investment banking Capital structure Transactions
(terms / conditions)Initial public offering (IPO) · Secondary market offering (SEO) · Follow-on offering · Rights issue · Private placement · Spin out · Equity carve-out · Greenshoe (Reverse) · Book building · Bookrunner · UnderwriterTakeover · Reverse takeover · Tender offer · Proxy fight · Poison pill · Staggered board · Squeeze out · Tag-along right · Drag-along right · Pre-emption right · Control premium · Due diligence · Divestment · Sell side · Buy side · Demerger · Super-majority · Pitch book
ValuationFinancial modeling · Free cash flow · Business valuation · Fairness opinion · Stock valuation · APV · DCF · Net present value (NPV) · Cost of capital (Weighted average) · Comparable company analysis · Accretion/dilution analysis · Enterprise value · Tax shield · Minority interest · Associate company · EVA · MVA · Terminal value · Real options valuationCategories:
- Corporate finance
- Economics and finance stubs
Wikimedia Foundation. 2010.