DE-MERGER
A demerger, also known as a divestiture or spin-off, is a corporate restructuring strategy in which a company separates one or more of its business units or divisions into distinct entities. This process involves the distribution of shares of the new independent company to the shareholders of the original company. Demerger is often undertaken to enhance operational efficiency, improve management focus, and unlock the hidden value of individual business segments. By creating separate entities, each company can pursue its own strategic objectives, attract targeted investors, and operate with greater flexibility. It allows management teams to concentrate on their core competencies, optimise resource allocation, and respond more effectively to changing market conditions. There are different types of demergers, including spin-offs, split-ups, and split-offs, depending on the method of separation and how shareholders are compensated. A spin-off typically results in the creation of a new, independent entity whose shares are distributed proportionally to existing shareholders. A split-up involves the dissolution of the parent company and the distribution of its various divisions as separate entities, while a split-off allows shareholders to exchange their parent company shares for shares in the new entity.