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20-423: A NewCo or Newco is a term used to describe a corporate spin-off , startup , or subsidiary company before they are assigned a final name, or to proposed merged companies to distinguish the to-be-formed combined entity with an existing company involved in the merger which may have the same (or a similar) name. In a handful of cases the new company may retain the name "Newco". The term can also be used to describe

40-529: A company that was created to replace its predecessor, which ceased to exist for reasons such as financial issues: the creation of a NewCo to continue the existence of Rangers F.C. was a notable example. This business-related article is a stub . You can help Misplaced Pages by expanding it . Corporate spin-off Spin-offs are divisions of companies or organizations that then become independent businesses with assets, employees, intellectual property , technology , or existing products that are taken from

60-453: A new environment. Spin-offs also allow high-growth divisions, once separated from other low-growth divisions, to command higher valuation multiples. In most cases, the parent company or organization offers support doing one or more of the following: All the support from the parent company is provided with the explicit purpose of helping the spin-off grow. The United States Securities and Exchange Commission 's (SEC) definition of "spin-off"

80-507: A series costly write-downs since its split-off from Fosters. The company was accused of "channel stuffing"- inflating sales by pushing more to wholesalers than they wish. Treasury Wine tried to capitalize on strong demand of Penfold in China by bundling it with Wolf Blass and Rawson's Retreat. China accounts for half of Treasury's sales in Asia and 80 per cent of its growth in the region, according to

100-658: Is an Australian global winemaking and distribution business with headquarters in Melbourne . It was formerly the wine division of international brewing company Foster's Group . Treasury Wine Estates traces its roots back to the establishment of several New World wineries in the 19th century. These include Lindeman's and Penfolds in Australia, and Beringer Vineyards in the United States. Foster's began to build its wine division from 1995 onwards. Through acquisition, it built

120-685: Is divided into four regions: (1) Australia and New Zealand, (2) the Americas (i.e. United States and Canada only), (3) Europe (including Latin America), and (4) Asia (including the Middle East and Africa). Globally the company says it has access to more than 13,000 hectares of owned or leased vineyards, with more than 3400 employees, and 36 million cases of wine sold in the 2017 financial year. In 2013, Treasury Wine had to destroy six million bottle of wines in U.S. due to massive oversupply. The company suffered from

140-457: Is more precise. Spin-offs occur when the equity owners of the parent company receive equity stakes in the newly spun off company. For example, when Agilent Technologies was spun off from Hewlett-Packard (HP) in 1999, the stockholders of HP received Agilent stock. A company not considered a spin-off in the SEC's definition (but considered by the SEC as a technology transfer or licensing of technology to

160-512: Is now called Treasury Wine Estates . According to The Economist , another driving force of the proliferation of spin-offs is what it calls the " conglomerate discount " — that "stockmarkets value a diversified group at less than the sum of its parts". Some examples of spin-offs (according to the SEC definition): Examples following the second definition of spin-out: An example of companies created by technology transfer or licensing: Treasury Wine Estates Treasury Wine Estates

180-431: The parent company . Shareholders of the parent company receive equivalent shares in the new company in order to compensate for the loss of equity in the original stocks . However, shareholders may then buy and sell stocks from either company independently; this potentially makes investment in the companies more attractive, as potential share purchasers can invest narrowly in the portion of the business they think will have

200-509: The board of directors appointed Michael Clarke, a former food executive with Kraft Foods and Premier Foods , as CEO. In 2015, Treasury reportedly began reducing its presence in the British market to concentrate on Asia, where margins were much higher. However, later that year Treasury bought the majority of the wine business of London-based multinational Diageo . In July 2016, Treasury Wine Estates slimmed down its wine portfolio, announcing

220-458: The division into one of the world's largest winemakers. By 2005, Beringer Blass was the seventh largest producer of wine in the United States . The same year, Fosters acquired the Australian wine-making group Southcorp , adding famous brands including Lindeman's, Penfolds and Rosemount , and around A$ 1 billion to revenues. However, the wine division performed poorly, often draining cash from

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240-536: The division resulted in an additional A$ 1.3 billion write-down, 99 per cent of Fosters Group shareholders agreed at a meeting in Melbourne in April 2011 to split Fosters Group business into separate brewing and wine companies. Treasury Wine Estates officially became a separately listed company the following month, with David Dearie as its CEO. Further write-down of stock worth around A$ 160 million took place in 2013, followed by

260-429: The highly profitable brewing business. In 2008, Foster's chief executive officer Trevor O'Hoy resigned. By 2011, the company had written down the value of the wines division by half since it acquired it at the peak of the market, leaving it worth about A$ 3.1 billion. In 2022 it was ranked the largest Australian wine company by production, and also the largest in terms of total revenue. After further difficulties in

280-414: The main reasons for what The Economist has dubbed the 2011 "starburst revival" is that "companies seeking buyers for parts of their business are not getting good offers from other firms, or from private equity". For example, Foster's Group , an Australian beverage company, was prepared to sell its wine business. However, due to the lack of a decent offer, it decided to spin off the wine business, which

300-529: The markets who accused the company of engaging in illegal practices including "channel stuffing" in attempts to inflate its profits. In July 2020, Michael Clarke stood down as CEO and was replaced by the long-term executive, Tim Ford. In November 2021, Treasury acquired Napa Valley luxury winemaker Frank Family Vineyards for A$ 434 million. In October 2023, the Treasury announced it would acquire US rival Daou Vineyards for at least A$ 1.4 billion. The business

320-520: The most growth. In contrast, divestment can also sever one business from another, but the assets are sold off rather than retained under a renamed corporate entity. Many times, the management team of the new company are from the same parent organization. Often, a spin-off offers the opportunity for a division to be backed by the company but not be affected by the parent company's image or history, giving potential to take existing ideas that had been languishing in an old environment and help them grow in

340-478: The new company) may also be called a spin-off in common usage. A second definition of a spin-out is a firm formed when an employee or group of employees leaves an existing entity to form an independent start-up firm. The prior employer can be a firm, a university, or another organization. Spin-outs typically operate at arm's length from the previous organizations and have independent sources of financing, products, services, customers, and other assets. In some cases,

360-561: The redundancy of David Dearie and the appointment of interim chief executive Warwick Every-Burns. This left the business in a more fragile state as shares dropped almost A$ 2 to just above A$ 4. Steamrollers crushed millions of bottles of cheap wine to dispose of excess stock in the United States. This eventually led to a class-action by disgruntled shareholders which was settled in 2017. Treasury has since worked with Accolade Wines to promote bottling efficiency, strengthening its performance in Asia, Australia, New Zealand and Europe. In 2014,

380-470: The sale of 12 cheap wine brands in the United States. The sale of the US brands represented around one million cases of wine. By 2017, Treasury had begun stockpiling luxury wines and rationing their release in China and the United States. More money was spent marketing the most profitable brands. In January 2019, Treasury's share price fell dramatically on a slew of news reports and was targeted by short sellers in

400-407: The spin-out may license technology from the parent or supply the parent with products or services; conversely, they may become competitors. Such spin-outs are important sources of technological diffusion in high-tech industries. Terms such as hive-up, hive down or hive across are sometime used for transferring a business to a parent company, a subsidiary company or a fellow subsidiary. One of

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