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{{More citations needed|date=November 2017}}
A '''corporate spin-off''', also known as a '''spin-out''',<ref>New Zealand Master Tax Guide (2013 edition) – p. 771 1775470024 CCH New Zealand Ltd – 2013 "Essentially, a 'spinout' involves the transfer by a parent company of shares in a wholly owned subsidiary to the shareholders in the parent. To the extent that there is a common interest in the old and new holding companies, the spinout ..."</ref> or '''starburst''' or '''hive-off''',<ref>{{cite web |title=Definition of hive off |url=https://www.thefreedictionary.com/hive+off |
==Characteristics==
Spin-offs are divisions of companies or organizations that then become independent businesses with assets, employees, [[intellectual property]], [[technology]], or existing products that are taken from the [[parent company]]. Shareholders of the parent company receive equivalent [[shares]] in the new company in order to compensate for the loss of equity in the original [[Stock|stocks]]. However, shareholders may then buy and sell stocks from either company independently; this potentially makes investment in the companies more attractive, as potential share purchasers can invest narrowly in the portion of the business they think will have the most growth.<ref>{{cite journal|last1=Zahra|first1=Shaker A.|title=Governance, Ownership, and Corporate Entrepreneurship: The Moderating Impact of Industry Technological Opportunities.|journal=[[Academy of Management Journal]]|date=1 December 1996|volume=39|issue=6|pages=1713–1735|doi=10.2307/257076|jstor=257076}}</ref>
In contrast, [[divestment]] can also sever one business from another, but the assets are sold off rather than retained under a renamed corporate entity.
Many times, the [[management]] team of the new company are from the same parent organization. Often, a spin-off offers the opportunity for a division to be backed by the company but not be affected by the parent company's image or history, giving potential to take existing ideas that had been languishing in an old environment and help them grow in a new environment. Spin-offs also allow high-growth divisions, once separated from other low-growth divisions, to command higher valuation multiples.<ref>{{cite web |last1=Wisler |first1=Philip |date=May 2014 |title=Spin-off Transactions: A Disaggregation Strategy Promises Rewards |url=https://www.transactionadvisors.com/insights/spin-transactions |
In most cases, the parent company or organization offers support doing one or more of the following:
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===U.S. Securities and Exchange Commission===
The [[United States Securities and Exchange Commission]]'s (SEC) definition of "spin-off" is more precise. Spin-offs occur when the equity owners of the parent company receive equity stakes in the newly spun off company.<ref>{{cite web |
===Other definitions===
A second definition of a spin-out is a firm formed when an employee or group of employees leaves an existing entity to form an independent start-up firm. The prior employer can be a firm, a university, or another organization.<ref>{{cite book|last1=Richards|first1=Graham|title=Spin-Outs: Creating Businesses from University Intellectual Property|date=2008|publisher=Harriman House|location=Petersfield, Hampshire|isbn=9781905641987|url=https://books.google.com/books?id=i-LZ6w7HMg8C|access-date=November 14, 2017}}</ref> Spin-outs typically operate at [[Arm's length principle|arm's length]] from the previous organizations and have independent sources of financing, products, services, customers, and other assets. In some cases, the spin-out may license technology from the parent or supply the parent with products or services; conversely, they may become competitors. Such spin-outs are important sources of [[Diffusion of innovations|technological diffusion]] in high-tech industries.
Terms such as hive-up, hive down or hive across are sometime used for transferring a business to a parent company, a [[subsidiary]] company or a fellow subsidiary.<ref>{{cite web |date=1 Dec 2015 |title=Hive up under FRS 102 |url=https://www.icaew.com/technical/tas-helpsheets/financial-reporting/accounting-for-a-hive-up-under-frs-102 |
==Reasons for spin-offs==
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* [[Guidant]] was spun off from [[Eli Lilly and Company]] in 1994, formed from Lilly's Medical Devices and Diagnostics Division.
* [[Agilent Technologies]] spun off from [[Hewlett-Packard]] (HP) in 1999, formed from HP's former test-and-measurement equipment division. Later in 2014, [[Keysight]] was spun off from Agilent Technologies.
* [[Expedia Group]] was spun off from [[Microsoft]] in 1999, with its eponymous subsidiary [[Expedia.com|Expedia]].
* [[DreamWorks Animation]] was spun off from [[DreamWorks Studios|DreamWorks Pictures]] in 2004.
* [[Covidien]] was spun off from [[Tyco International]] in 2007.
* [[TE Connectivity]] was spun off from [[Tyco International]] in 2007.
* [[Cenovus Energy]] was spun off from Encana (now [[Ovintiv]]) in 2009.
* [[AOL]] was a [[Time Warner]] spin-off in 2009; this effectively was a [[demerger]], as AOL had previously merged into Time Warner.
* [[Ocean Rig UDW Inc|Ocean Rig]] was spun off from [[Dryships Inc|DryShips]] in September 2011.
* [[News Corporation (1980–2013)|News Corporation]]'s publishing operations (and its broadcasting operations in Australia) were spun off as [[News Corp (2013–present)|News Corp]] in 2013. The previous News Corporation's remaining media properties were retained under the name [[21st Century Fox]]. In turn, 21st Century Fox was acquired by [[The Walt Disney Company]] in 2019, but most of its broadcast and cable properties were spun off to the new [[Fox Corporation]] while Disney retained the film and television production units.
* After being acquired by [[Sega]], [[Index Corporation]]'s video game operations were re-branded as [[Atlus]], the name of a predecessor company, while its contents and solution businesses were spun off as a new company using the Index Corporation name in 2013.
* [[Mallinckrodt|Mallinckrodt Pharmaceuticals
*[[Viacom (1952–2006)|Viacom]] was spun off from [[CBS]] in 1971.
*[[Fortive]] and [[Envista]] were spun off from [[Danaher Corporation|Danaher]] in 2016 and 2019 respectively.
*In [[South Korea]], the then-[[CJ E&M]] (now [[CJ ENM]] Entertainment Division) spun off its drama production and distribution division into a new subsidiary company called
Examples following the second definition of spin-out:
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An example of companies created by [[technology transfer]] or licensing:
* Since 1997, [[Isis Innovation|Oxford University
==See also==
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