Shares of Match Group at last check were down 2.9% to $102.96, while IAC was up 3.6% to $106.75.
As a result of the separation, Match Group's dual-class voting structure has been eliminated. And the interest in Match Group that IAC held is now held directly by IAC's shareholders.
When the transaction closed, IAC holders received one IAC common share and 2.1584 Match Group common shares for each IAC share they held prior to the transaction.
In addition, IAC received $838 million cash, representing $3 a share of Match Group common IAC previously held and the aggregate cash consideration not elected by Match Group public shareholders.
IAC said it expects to receive an additional $1.4 billion of proceeds from the sale of Match common shares. That's expected to close Wednesday.
"This is just the largest transaction at the core of our strategy throughout these 25 years," Barry Diller, IAC's chairman and senior executive, said in a statement.
"Be opportunistic, be balance-sheet conservative, build up enterprises, and when they deserve independence, let them have it. Be a conglomerate and an anti-conglomerate, a business model that has been unique to us."
With a market cap of $30 billion, Match Group is the largest business IAC has separated in its 25-year history, IAC said.
Since Match Group's initial public offering in 2015, the company has more than doubled subscribers and revenue.
Match Group's flagship product, Tinder, is the highest grossing nongaming app worldwide, with a global presence, the company said.
"Back to work again," said Joey Levin, chief executive of IAC and executive chairman of Match Group. "This is the fun part."
IAC is the parent of HomeAdvisor/Angie’s List ANGI, website owner Dotdash, mobile app developer Mosaic Group, family care services marketplace Care.com and video creation, distribution and monetization platform Vimeo.