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What is the difference between the option of a "spin-off" and a "wholly owned subsidiary"?
I wanted to save a brand and bought it from a competitor (incl. branches & factories). Even developed a couple of new models for them to make sure they succeed. Now I am not sure weather to spin them off or ro create a wholly owned subsidiary.
The explanations (ingame) seem quite similar. Since I own 100% of the brand and its factories and branches, the effect would be the same, right?
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02-28-2017, 09:20 AM
(This post was last modified: 02-28-2017, 09:20 AM by Eric.B.)
Wholly owned subsidiary would be a division in your company that is operated separately. You are responsible for their expenses. Likewise you can take all of their profits without repercussion. Think TATA and Jaguar. TATA owns Jaguar outright, but Jaguar operates as its own company separated from TATA.
Spinning off a marque means that company becomes an actual company separated from you. You might have voting control but other share holders can sue you for stripping the company, or diluting it. If you want to bring it back under your banner, you will have to reacquire it. Ect. However, since it is its own company, you are not liable if it fails. An example of this would be Ferrari and Fiat. (Previously Ferrari was a wholly owned subsidiary of Fiat.)
So that's pretty much it. Subsidiary = Part of your company ran by AI. Spin Off = New Company ran by AI.
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That was informative, especially the real-life examples. Thank you.
