Time is right for US reverse morris trusts

Author: Amélie Labbé | Published: 31 Oct 2016

Reverse morris trusts (RMT) are enjoying a surge in popularity as US companies are increasingly reevaluating the structure of their portfolios under pressure from the market and investors.

A growing number of recent transactions have used the structure – which combines a spinoff with a tax-free merger – especially public companies seeking to divest struggling and/or non-core units which would be a better fit for another organisation.

This has proved especially true since the financial crisis, as companies look to restructure their businesses to focus on their core expertise.

P&G has used the RMT structure on multiple occasions

Hewlett Packard is in the process of spinning off its consulting unit, Enterprise Services, which will then be acquired by information technology group CSC.

Household goods manufacturer P&G, which has used the RMT structure on numerous occasions, is also going down the same route, separating its Specialty Beauty Brands business and...