There is a very real risk that companies spin off completely dead weight (see Honeywell's spinoff of Garrett). eBay spinning off PayPal a few years ago is an example on the opposite end. Assuming the management team is acting in good faith, it usually is because the two divisions lack synergies and have different potential growth trajectories and paths. For instance, the fast growing division might not be able to spend enough money because investors view the overall company as a slow, stable grower while the stable division is upset that the fast growing division is sucking up its profits to grow. In cases like these, it might not be a dead business, but something like eBay.