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Spin-offs occur when the equity owners of the parent company receive equity stakes in the newly spun off company. [6] For example, when Agilent Technologies was spun off from Hewlett-Packard (HP) in 1999, the stockholders of HP received Agilent stock. A company not considered a spin-off in the SEC's definition (but considered by the SEC as a ...
Equity carve-out (ECO), also known as a split-off IPO or a partial spin-off, is a type of corporate reorganization, in which a company creates a new subsidiary and subsequently IPOs it, while retaining management control. [1] [2] Only part of the shares are offered to the public, so the parent company retains an equity stake in the subsidiary ...
The landmark case that has been used to determine active trade or business requirement is Estate of Lockwood v. Commissioner, 350 F.2d 712. Other relevant sources are Revenue Ruling 2003-38, which entails whether an expansion of a corporation's business constitutes a new or continuing business under Reg. 1.355-3(b)(3)(ii).
News of Comcast’s cable spin-off broke Tuesday, coming less than a month after the company told investors on Oct. 31 it was exploring the scenario. Comcast is not holding a conference call with ...
Starting in the fifth merger wave (1992–1998) and continuing today, companies are more likely to acquire in the same business, or close to it, firms that complement and strengthen an acquirer's capacity to serve customers. In recent decades however, cross-sector convergence [45] has become more common. For example, retail companies are buying ...
The spin-off is a time-honored corporate transaction. So it's not unusual that American Realty Capital Properties and Simon Property Group have plans to separate out some of their properties as ...
When Valero Energy Corp. (NYSE: VLO) reported second quarter earnings last July, the company said it would seek a tax-efficient spin-off of its retail business. In a presentation to investors ...
A Reverse Morris Trust is used when a parent company has a subsidiary (sub-company) that it wants to sell in a tax-efficient manner. The parent company completes a spin-off of a subsidiary to the parent company's shareholders. Under Internal Revenue Code section 355, this could be tax-free if certain criteria are met. The former subsidiary (now ...