Although the parent retains control, the shareholder base of the subsidiary that has undergone an equity carve-out is unlikely to be different than that of the parent as a result of the public sale of equity.

Question

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The shareholder base of the subsidiary that has undergone an equity carve-out is likely to be different than that of the parent as a result of the public sale of equity. The equity carve-out may attract new investors who are interested in the subsidiary's specific business or operations, and may not necessarily have been shareholders of the parent company.

Although the Parent Retains Control, the Shareholder Base of the Subsidiary