Business and Personal Finance Dictionary

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• SPIN-OFF
  
  In a spin-off, a company sets up one of its existing subsidiaries or divisions as a separate company. Shareholders of the parent company receive stock in the new company in addition to the stock they hold in the parent based on an evaluation established for the new entity. The motives for spinoffs vary. In some cases, a company may want to refocus its core businesses, shedding those that it sees as unrelated. Or it may want to set up an Internet company to capitalize on investor interest. In other cases, a corporation may face regulatory hurdles in expanding its business and spin off a unit to be in compliance. In some cases, a group of employees will assume control of the new entity through a buyout, an employee stock ownership plan (ESOP), as the result of negotiation.
  
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