Definition and Examples
- Definition
- A split-off divestiture is a corporate action in which a company separates a business unit, division, or subsidiary into a standalone, independent entity, but unlike a spin-off, it requires existing shareholders to exchange their shares in the parent company for shares in the newly formed entity. This process effectively separates the ownership of the parent company and the newly created company. Split-off divestitures are undertaken for various reasons, such as to focus on core competencies, improve operational efficiency, or comply with regulatory requirements.