Spin-Offs

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  • A parent distributes the stock of a subsidiary in the form of a dividend
  • Following the distribution, the stockholders hold stock in the parent and the stock in the company that was spun off
  • Two independent companies exist where before there was only one
  • A parent distributes the stock of a subsidiary in the form of a dividend
  • A Spin-Off effectively removes the parent from management and control of the subsidiary
  • Pure spins are tax efficient