AMSTERDAM (Reuters) - Corporate demergers range from the classic spin-off, in which existing shareholders are given shares in a business division which then trades as a separate company, to the carve-out, in which the division is sold to new investors via an initial public offering (IPO) - benefiting shareholders of the parent only indirectly.
Here are how several of the more prominent European spin-offs this year were structured, and how they have fared so far.
*Fiat Chrysler's Ferrari (RACE.MI) disposal was a hybrid. The Italian auto group first held an IPO for its sportscar division in October 2015, selling a 10 percent stake for $893 million. The Ferrari family retained its 10 percent holding. Then at the start of January, Fiat Chrysler (FCHA.MI) distributed the remaining 80 percent of shares to Fiat shareholders.
In 2016, Fiat shares are down 13 percent but Ferrari is up 12 percent. Fiat shareholders who held both their Fiat and Ferrari shares have seen a combined return of roughly 60 percent in the calendar year to date.
*Philips(PHG.AS) sold a 29 percent stake in its lighting division in a May IPO that raised 750 million euros (now $793 million). It plans to sell its remaining stake over time in Philips Lighting (LIGHT.AS), the world's largest lighting company.
Shares in Philips, now a pure healthcare equipment maker, are up 17 percent year to date. Philips Lighting has risen 6.8 percent since the IPO.
*After years of underperformance, Germany's two largest energy companies E.ON (EONGn.DE) and RWE (RWEG.DE) both separated their fossil fuel generation operations this year from their renewable and power grid assets to simplify their structures and give investors more choice. However, they used significantly different strategies.
*E.ON spun off its fossil fuel operations as Uniper (UN01.DE) in September, with shareholders receiving 53 percent of the new company, which was valued at around 4 billion euros. E.ON holds the other 47 percent. While the move simplified E.ON, investors are still in a quandary as the parent kept not only its renewable generation assets but also its nuclear plants, which must be wound down and are a liability.
With E.ON shares down 21 percent year to date but Uniper up 15 percent, E.ON shareholders who have continued to hold both are about flat on the year.
*RWE kept its fossil fuel and nuclear plants together while carving out its sustainable assets via an IPO in October under the name Innogy (IGY.DE). The flotation included existing and new shares, bringing in 3.5 billion euros in cash for RWE, and raising 2 billion euros in new capital for Innogy. RWE kept 75 percent of Innogy, and plans to continue holding a controlling stake.
RWE shares are up 7.3 percent year to date; Innogy shares are down 6.8 percent since the IPO.
RWE's market capitalization is just 7 billion euros at current prices, while Innogy is worth nearly 19 billion. That implies the value of the parent would be significantly negative without ownership of Innogy.
Reporting by Toby Sterling; editing by David Stamp