As part of the demutualization process, members of a mutual usually receive a "windfall" payout, in the form of shares in the successor company, a cash payment, or a mixture of both.
By contrast, a joint stock company raises capital from its shareholders and other financial sources in order to provide services to its customers, with profits or assets distributed to equity or debt investors.
In any type of demutualization, insurance policies, outstanding loans, etc., are not directly affected by the organization's change of legal form.
"The road to this initial public offering began in June 2000, when Exchange members voted overwhelmingly to transform the then not-for-profit, membership-owned organization into a for-profit, shareholder-owned corporation.
The Chicago Board of Trade similarly carried out an IPO in 2005, having previously been "a self-governing, self-regulated Delaware not-for-profit, non-stock corporation that serves individuals and member firms".
[9] SIX Group, a global financial service provider based in Switzerland, represents an extra ordinary form of a mutualised organisation.
Policyowners were awarded cash, stock and policy credits exceeding $100 billion in a wave of demutualizations, which have been regarded by some as very rewarding to the new owners although the effect on customers is not discussed.
[10] Mass Mutual Financial Group's Web site defines life insurance policy dividends.
One of the largest, CF Industries, a manufacturer and distributor of fertilizers in the United States, was for 56 years a cooperative federation.
Many societies soon became targets of speculative "carpetbaggers", who opened savings accounts in order to obtain a windfall, in cash or shares, in the event of demutualisation.
In 1997, Andrew Regan launched an unsuccessful hostile takeover bid to demutualize the UK's giant Co-operative Wholesale Society, which, despite its name, was a large retailer in its own right.
In 2008, a Swiss competition regulator recommended demutualization to Switzerland's leading supermarket chains, Coop and Migros.
[18] Irish grocer-owned retailers' cooperative, ADM Londis, changed its capital structure in 2004 to an unlisted public limited company, allowing its owners to trade its stock privately at market value.