Shrinkage Strategies
1. Divestures – Sale of a segment of a company (assets, a product line, a subsidiary) to a third party for cash and/or securities.
2. Equity Carve outs – A transaction in which a parent firm offers some of a subsidiary’s ordinary shares to the general public to bring in a cash infusion without loss of control.
3. Spin-offs – A transaction in which a company distributes on a pro rata basis all of the shares it owns in a subsidiary to its own shareholders; creates a new public company with (initially) the same proportional equity ownership as the parent company.
4. Tracking Stock – A separate class of ordinary shares of a company that tracks the
performance of a particular segment or division.
francis1897 answered the question on February 27, 2023 at 06:33