For some companies, it’s like a divorce. For others, it’s merely saying goodbye to a good friend. They are corporate spin-offs, in which businesses cleave off part of their operations into an independent company.
E-commerce giant EBay (EBAY) is just the latest to join the spin-off bandwagon. Earlier this week, it said that it would split online payment service PayPal into its own company.
The split follows pressure by activist investor Carl Icahn, who for months insisted that the companies break-up. EBay CEO John Donahoe, who initially resisted the idea, eventually changed his mind. Here are eight other notable spinoffs in the recent annals of business history.
1. Time Warner and Time Inc.
When Time Warner spun off magazine publisher Time Inc. in June, Fortune called the new company “America’s oldest startup.” Even a business with a long history needs to reinvent itself.
Time (TWX), founded over 90 years ago, tied up with then Warner Communications in 1990. But the media world eventually shifted online, leaving Time struggling to adapt. After failing in trying to sell its publishing business, Time Warner decided to unload most of it into a separate company. The official split happened earlier this year, with Time Warner keeping its cable and entertainment properties like HBO, TNT and CNN.
Time Warner (TWX) also split with AOL in 2009, after about nine years. In 2001, Time Warner CEO Jeff Bewkes called the merger with AOL the “biggest mistake in corporate history.” He certainly didn’t hold back with that statement.
Energizer, known for its battery-powered bunny, was running low on energy. As a result, it decided to shave off the division that made Shick razors and other personal care products.
In May, Energizer (ENR) announced plans to spin off its “struggling” household products business that also includes sunscreen lotion. That soon-to-be company doesn’t have a name yet, but it sure could benefit from a pink bunny to shock the business into action.
3. Coach, Sara Lee and Hillshire
Who said frozen foods and leather bags weren’t a match made in heaven? That was apparently the case in 2000 when Sara Lee Corporation, a frozen baked goods maker, spun off Coach (COH), the leather goods maker. At the time, Sara Lee’s president Steve McMillan said he wanted to focus on streamlining the business.
But the shake-ups haven’t ended for Sara Lee in recent years. In 2010, the company went the spin-out route again and cleaved off part of its food and beverage businesses into Hillshire Brands (SLE).
4. McDonald's and Chipotle
In this case, McDonald’s didn’t want to supersize itself. After building the popular Mexican food chain Chipotle (CMG), McDonald’s decided to spin it out as an independent company. It has seemed to work for Chipotle, at least. Chipotle has tripled its number of restaurants since the spin out. Steve Ells, Chipotle’s founder and co-CEO said in a 2013 interview that he never felt that his company reached its “full potential” while part of McDonald’s.
5. CBS and Viacom
The media corporation shake-ups are never-ending, it seems.
In 2006, CBS (CBS) and Viacom (VIA), the cable television and film company, split into two after merging just seven years prior. But the two companies shared history long before that. In fact, Viacom started in 1970 as CBS’ syndication division, but was split from the company a year later. That makes two spin-outs for those who are counting.
6. Mondelez and Kraft
Kraft Foods, the maker of Miracle Whip, tried to stir up success by splitting off its Oreos and Triscuits business. And two years later, it seems the gourmet gamble paid off.
In 2012, Kraft Foods (KRFT) and Mondelez International (MDLZ) divided into two companies. At the time, Mondelez believed cutting away from Kraft would give it freedom from a somewhat stale business. Maybe. But Kraft has also done pretty well without Mondelez.
7. News Corp
Rupert Murdoch agreed to split up his 60-year-old media empire to free his healthy entertainment and satellite television business from the yoke of a struggling publishing arm that included The Wall Street Journal. As a result, 21st Century Fox, home to a movie studio and Fox television, was born. Meanwhile, the publishing arm retained its old News Corp. name.
8. Agilent and HP
Computers and bio-analytic measurement instruments don’t exactly go hand-in-hand. But that was Hewlett-Packard (HP) before it split off and chemical analysis and diagnostics company Agilent (A) in 1999. Formed from HP’s non-computing products, the newly-formed Agilent – the name was inspired by the word “agile – started with $8 billion and about 47,000 employees.