Divesting Assets and Businesses
Summary
Divestiture transactions involve the sale by a parent company of one or more subsidiaries or sets of assets rather than a sale of the entire enterprise. This practice note discusses various transaction structures that can be used to effect a divestiture transaction: (1) the sale of specified assets or a subsidiary, (2) the sale of the securities of a subsidiary that holds the target business in an initial public offering (referred to as an equity carve-out), and (3) the distribution of shares of a subsidiary that holds the target business, referred to as a spin-off. In addition, this practice note addresses the rationale for using a particular structure and other related considerations.