Demergers urged for top FT-SE companies

Half the companies in the FT-SE 100 should seriously consider demerging, a new book on business methodology reveals.

Such activity would lead to a host of subsidiary identities being reviewed and new names being created, says Andrew Campbell, director at Ashridge Strategic Management Centre and one of the authors of Break Up! When Large Companies Are Worth More Dead Than Alive, which is published on Monday.

“Any deal that creates changes of ownership … creates design work,” Campbell adds.

Break Up! describes the phenomenon as an unstoppable trend with enormous potential for performance improvement as well as a huge shareholder value opportunity.

UK companies which demerged last year with the help of design consultancies include British Gas and the Hanson Group. Hanson had design input from The Identica Partnership, Village Design Group and its in-house team.

Michael Wolff, who was retained as a consultant on the demerger of British Gas into BG and Centrica, says of creating marques for demerged companies: “It’s a sort of rebirth thing. It’s quite a skill.”