Split-Off

A type of corporate reorganization whereby the stock of a subsidiary is exchanged for shares in a parent company.

Investopedia Says:
This is a somewhat rare situation. For example, Viacom announced a split off of its interest in Blockbuster in 2004 whereby Viacom offered its shareholders stock in Blockbuster in exchange for an appropriate amount of Viacom stock.

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Either of two types of tax-free reorganizations. Under a Type No. 1 exchange, a corporation transfers part of its assets to a new corporation in exchange for stock of the new corporation. The original corporation then distributes the same stock to its shareholders, who in turn surrender part of their stock in the original corporation.

A Type No. 2 contraction occurs when a parent company transfers stock of a controlled corporation to its stockholders in redemption of a similar portion of their stock. ‘Control' refers to the ownership of 80% or more of the corporation whose shares are being distributed.

The process whereby a parent corporation organizes a subsidiary corporation to which it transfers part of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the shareholders of the parent corporation in exchange for a portion of their parent stock.

A split-off differs from a spin-off in that the shareholders in a split-off must relinquish their shares of stock in the parent corporation in order to receive shares of the subsidiary corporation whereas the shareholders in a spin-off need not do so.