1.3 De-Mergers

Question 1

Reasons for de-mergers

Answer 1

1) Reduce diseconomies of scale
2) Reduced scrutiny by authorities
3) Focus on core business

Question 2

Examples of de-mergers?

Answer 2

PayPal split from eBay

Question 3

Impact on stakeholders?

Answer 3

1) Short-term costs but long-term higher profits
2) Job losses for workers
3) Impact on prices is uncertain