Demerger

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A demerger is a form of corporate restructuring in which the 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-off 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] In contrast, divestment can also "undo" a merger or acquisition, but the assets are sold off rather than retained under a renamed corporate entity.

Demergers can be undertaken for various business and non-business reasons, such as

• Equity carve-out
• Successor company

References

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