What is a Spin-Off?

A spin-off involves the creation of an independent company through the sale or distribution of new shares of an existing business or division of a parent company. In general, for shareholders, the company exchanges the group's old shares for the shares of the new entity through an automatic allocation of securities (for example, as a distribution of a dividend in securities instead of a dividend in cash).

The last 18 months were marked by a sharp increase in the number of spin-offs on NYSE Euronext. These operations were very well received by the market. They are based on winning industrial strategies and bring about real value creation for investors.

The success of spin-offs is based on several major factors , explains Marc Lefevre, Director of Issuer Relations and Commercial Development for Europe, NYSE Euronext.

  • The first is that analysts and investors generally assess the strategies put in place and the nature of the assets made available to them . Spin-offs make it possible to offer top-quality financial information to investors who can more easily put a value on the newly independent entity's assets. The entity can thus finance its development, with a management team close to the activity.
  • These operations very often lead to true operational successes.
    Since the successful separation between Total and Arkéma in 2005, there have been many success stories. In 2010-2011, the spin-offs of TNT Express activities from Post NL, Edenred (Accor), Aperam, the former Arcelor Mittal, and Axway, now independent from Sopra, were also successful.
    These are operations prepared with great care", Marc Lefèvre points out. "The autonomy given to certain activities marks the rebirth of a spirit of enterprise and conquest within the newly created entity. This attracts investors and unifies employees around a widely shared project.

NYSE Euronext has gained genuine experience from these operations, for which we collaborate with the market's major players. NYSE Euronext can manage the listing of an entity that is the subject of a spin-off or carve-out on several markets at the same time and allow it to increase its return on investment.