Equity Carve-out

Under an equity carve-out (English, German as: ' carving out of equity '), partly spin-out, is understood to mean a form of divestiture in which a group shares of a subsidiary, for example, as part of a new issue ( Initial Public Offering) on the stock exchange sold.

A distinction is equity carve-out of a spin-off (also called spin-out ) in which the existing shareholders get " free " allocated shares in the subsidiary ( in German also split or spin-off ); while the total shares of a subsidiary are listed on the stock exchange. In an equity carve-out, however it is a sale of shares, in which usually only a minority of the shares of the subsidiary will be offered. The advantage for the parent company is that they can retain management control and can simultaneously collect the proceeds from the IPO.

Disadvantage compared to other forms of financing is that the subsidiary is subject to strict control and publication requirements of a listed company. In addition, the parent company can not control the ownership of the shares traded on the stock exchanges.

• Business Administration
• Securities issue