Demergers And Investment

Question 1

What is a Demerger?

Answer 1

When a business decides to split into two or more separate firms .

Question 2

What are the aims for demergers?

Answer 2

• focus on core business and core products and reduce unit costs and improve profit margins.
• reduce the risk of diseconomies of scale., ie lower management costs
  -Defensive tactic to avoid attention of a country’s competition .\
  Raise money from asset sales.

Question 3

Give an example of demergers:

Answer 3

Sky and downjones