View source for Demerger

{{short description|Form of corporate restructuring}}{{Verification|date=February 2021}}

A '''demerger''' is a form of corporate restructuring in which the entity's business operations are segregated into one or more components.<ref name="Bryer">{{Cite book|last=Bryer|first=Lanning G.|title=Intellectual property assets in mergers and acquisitions|pages=12.2–12.3|publisher=John Wiley and Sons|year=2002|isbn=978-0-471-41437-7}}</ref> It is the converse of a [[Mergers and acquisitions|merger or acquisition]].

A demerger can take place through a [[corporate spin-off|spin-off]] by distributing 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.<ref name="Bryer"/>  

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 [[economic interventionism|government intervention]], by way of [[antitrust]] law, or through [[decartelization]].<ref name="Krishna">{{Cite book|last=Krishna|first=K.L.|author2=Uma Kapila|title=Readings in Indian Agriculture and Industry|page=599|publisher=Academic Foundation|year=2009|isbn=978-81-7188-734-7}}</ref>

== See also == 
* [[Equity carve-out]]
*[[Successor company]]

==References==
{{Reflist}}

{{Corporate finance and investment banking}}

[[Category:Corporate finance]]
[[Category:Restructuring]]

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