Demutualization (or demutualisation) is the process by which
mutual organizations or companies (mutuals) convert themselves to for-profit (or profit-making)
public companies which distribute
profits to their
shareholders in the form of
dividends.Mutualization (or mutualisation) is the opposite process, wherein a public company is converted into a mutual company.Demutualization usually involves the sale or reorganization of a
mutual, by its members, to or into a non-mutual company whose
shares can be traded on a
stock market. This maneuver generally improves the company's access to investment
capital, and so increases its value as a viable business.
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mutual socities (e.g. building socities) turning into banks (see carpet-bagging).