evaluation of demergers

Question 1

synergies

Answer 1

The demerger could result in lost synergies which may result in poorer products and possible higher prices

Question 2

support

Answer 2

in addition one element of the company may find that it is unable to support itself now that it has split from the larger entity. As a result consumers may be disavanmtgae if certain products stop being produced

Question 3

job

Answer 3

The demerger may lead to job losses which can affect the reputation of the firm and their brand loyalty. if this happens then this may affect their sales revenue in the long run