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Demerger
MyWikiBiz, Author Your Legacy — Friday January 09, 2009
Demerger is the converse of a merger or acquisition. It describes a form of restructure in which shareholders or unitholders in the parent company gain direct ownership in a subsidiary (the ‘demerged entity’). Underlying ownership of the companies and/or trusts that formed part of the group does not change. The company or trust that ceases to own the entity is known as the ‘demerging entity’. If the demerged entity represents the majority of the company's operations, the resulting company is referred to as the stub.
