In this article, I present the results of my own recent study that provides new insights into the corporate motives for spin-offs. I argue that one of the most important reasons for spinning off a business segment by a multi-segment firm is to facilitate the company’s ability to pursue acquisitions. More specifically, the establishment of the spin-off common stock as a separate publicly-traded equity is expected to provide the spun-off firm with enhanced M&A opportunities by using its stock as an acquisition “currency.” Potential M&A targets may be more interested in accepting like-kind pure-play stock currency of the separated spun-off firm instead of stock consideration of a diversified multi-segment firm. Second, additional acquisitions made on behalf of one of the business segments within the multi-segment structure could create an imbalance within a portfolio of existing businesses with similar growth potential.