Norsk Hydro demerged its fertilizer arm Yara in 2004 and listed it on the Oslo exchange

Norsk Hydro, founded 1905 and partly state-owned, ran three unrelated businesses: oil and energy, aluminium, and fertilizers (Hydro Agri). Fertilizers competed for capital and management attention against the bigger energy and aluminium arms. In November 2003 Hydro's board concluded a plan to demerge the Agri activities into a new company, Yara International ASA; an extraordinary general meeting approved it on 15 January 2004.

The structure was deliberate: 80% of Yara went directly to Hydro shareholders (one Yara share per Hydro share), so no cash had to be raised from them, while Hydro kept 20% and sold half of that — 31.9 million shares at NOK 41, the top of the NOK 36–41 range — raising NOK 1.3 billion on listing day. Yara was listed on the Oslo Stock Exchange on 25 March 2004 and simultaneously repaid its intercompany debt to Hydro using newly established bank facilities, making it financially independent from day one.

Under CEO Thorleif Enger, the freed company pursued the growth its parent had rationed: it expanded globally and in 2007 acquired Finnish rival Kemira GrowHow, cementing its position as the world's largest mineral fertilizer company. Hydro, meanwhile, concentrated resources on oil, energy and aluminium as announced.

Listed at NOK 41/share (top of range); Yara grew into the world's largest fertilizer company, later topping $24bn revenue

Fertilizers were a sideline inside an energy-and-aluminium group and lost out in internal capital allocation

The demerger gave each business its own balance sheet, board and management focus

Distributing 80% of shares to existing holders avoided a cash call and kept the shareholder base intact

Hydro sold 10% of Yara on listing day at NOK 41 per share; the remaining 10% was subject to an over-allotment option, rather than already sold.

A division that is a sideline for its parent can be a world leader on its own; demerging lets each business take the decisions its own market demands.

Yara became the global leader in crop nutrition, operating in more than 60 countries; its 2007 Kemira GrowHow takeover made it the clear world No.1 in mineral fertilizers. Hydro concentrated on energy and aluminium, later spinning off its oil arm into Statoil in 2007. The 2004 demerger is cited as a model for how conglomerates — especially state-linked ones — can unlock value by separating unrelated businesses.