3.1.3 Demergers

• What are demergers?

  Involves the separation of a large company into two or more smaller companies
• What are reasons for demergers?

  • To focus on the core business
  • To increase profit
  • To raise finance
  • To avoid diseconomies of scale
  • To meet demand of regulators
• What is the impact of demergers on businesses?

  Allow focus on core business, raising funds from selling parts and removing loss-making parts
• What is the impact of demergers on workers?

  • Increase in job security 
  • Reduction in conflict between cultures 
  • Increase focus on the business allowing it to be more profitable
• What is the impact of demergers on consumers?

  • Greater competition
  • Lower prices
  • Better met consumer demands