Definition, Meaning & Synonyms

demutualization

noun

/ˌdiːˌmjuː.tʃuː.əl.aɪˈzeɪ.ʃən/

Definition

The process of converting a mutual organization, such as a mutual insurance company or a cooperative, into a company with shareholders.

Examples

This company’s demutualization has opened up new avenues for investment.
Investors welcomed the demutualization, expecting better returns.
The demutualization process can take several months and requires regulatory approval.

Meaning

Demutualization occurs when a mutual organization changes its structure to become a stock-based company, allowing it to issue shares to investors and operate for profit rather than solely for the benefit of its members.