demutualization investment & finance definition

The process of converting a mutual insurance company, or a mutually owned bank or savings and loan, into a company that has publicly-traded stock. A mutual company is one that is owned by its account holders or policyholders. Demutualization requires approval from mutual shareholders and policyholders. Typically, management advocates demutualization if it believes that reorganization is needed to enable the company to grow by having greater access to capital or being able to offer stock options to employees to attract the most qualified people.