Corporate Spin-Offs or Divisions
There are situations in which what most benefits a company is its division or spin-off, that is, the breakdown into two or more parts that can be sold, or that may become more profitable, secure, productive, or successful separately.
This is the opposite operation to a merger, but both are closely related as they are linked to the same special tax regime. In addition, it is common for a corporate spin-off to lead to a merger with other companies of the separated parts.
Having professionals who understand and have experience in the tax regime for corporate restructuring and in the corresponding procedures and formalities is essential to ensure the operation is successfully completed, as well as to take advantage of all the tax benefits available under current regulations.
Advantages of corporate spin-offs
Some of the advantages of spin-offs include:- prevents excessive growth of a single entity
- separation of real estate assets from the company’s core activity
- reorganization and protection of assets against potential future risks (creditors)
- allows the sale of a company to multiple buyers who cannot or are not interested in acquiring the whole entity
- economic benefits derived from tax advantages
- makes different business units independent, leading to more specialized and efficient management
➣ Increase operational efficiency with leaner and more agile structures.
➣ Greater attractiveness for targeted buyers and flexibility in divestment processes.
➣ Resulting companies attract investors aligned with their risk and growth profile.
Types of spin-offs
Broadly speaking, corporate divisions can be classified as:- total spin-off: all resulting entities are absorbed by other companies or become newly incorporated companies
- partial spin-off: part of the original company remains, while other parts are absorbed or separately incorporated
- segregation: similar to the above, but the spun-off entities receive shares from the original company
Trust the best specialists
It goes without saying that advising on and executing a spin-off must be handled by experts. Working with lawyers experienced in corporate restructuring ensures success in both the analysis and, if applicable, execution of the transaction.
Our corporate legal team operates from Madrid and handles transactions across Spain, with the ability to travel nationwide when required.
Visit us at our office at Avenida del Mediterráneo, 10, Madrid. Meetings can also be arranged via videoconference, and of course by telephone.
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