3.1.3 Demergers

• Reasons for Demergers


  -Lack of synergy and no efficiency gains may lead to diseconomies of scale

  -Share value may increase if the firm separates

  -Avoid attention from the competition authorities

  -Focus on a market to specialise and improve efficiency
• Impact of Demergers on Workers

  May be promoted to managerial roles in a separate business or may lose their jobs due to efforts to increase efficiency
• Impacts of Demergers on Firms


  Concentrating on a core business may increase efficiency and innovation but could also result in a loss of economies of scale