Companies may often reorganize and restructure their operations to perform various business activities in more focused way. The operational reorganization or restructuring of their operations can be done for different reasons and may have various objectives as well. In this article, we shall analyse Demerger in Corporate.<\/p>\n
A demerger<\/strong>[1] <\/sup><\/strong><\/a>is a strategy in which a single business is broken into different subunits, either to operate on their own, to be sold or to be dissolved. A de-merger allows a large company to split off its various units to invite or prevent an acquisition, to raise funds by selling off its units that are no longer part of the business’s core line, or to create separate units to handle different operations.<\/p>\n E.g.<\/strong> In early 2001, British Telecom led a de-merger of its mobile phone unit, BT Wireless, in an attempt to increase the performance of its stock. British Telecom took this action because it was struggling under high debt levels from the wireless venture.<\/p>\n A company may demerge due to the following reasons:<\/em><\/p>\n Some of the advantages of demerger have been listed below:<\/em><\/p>\n It is now a just and precise statement to give that, nowadays demergers are a common term involved with corporate restructuring. A demerged company refers to the one whose undertakings are transferred to the other company, and the company to which such undertakings are transferred is called as resulting company. The demerger can take place in any of the forms like spin off and split up.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Companies may often reorganize and restructure their operations to perform various business activities in more focused way. The operational reorganization or restructuring of their operations can be done for different reasons and may have various objectives as well. In this article, we shall analyse Demerger in Corporate. What is Demerger? A demerger[1] is a strategy in which […]<\/p>\n","protected":false},"author":4,"featured_media":50825,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1527],"tags":[1536],"acf":{"service_id":"69"},"yoast_head":"\nReasons for Demergers<\/h2>\n
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Advantages of Demerger<\/h2>\n
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Conclusion<\/h2>\n