Let’s take a comic stroll down memory lane to the 1980s — big hair, neon outfits, and a business trend where companies suddenly discovered that breakup songs weren’t just for unrequited love but for conglomerates too. Yes, today we dive deep into the world of demergers! (Not to be confused with that time you accidentally
### What is a demerger?
- [x] Large company splits into independent units
- [ ] Merger of small companies into a conglomerate
- [ ] Companies combining into a single entity
- [ ] Company hiring more employees
> **Explanation:** Demerger is when large companies break up into independent units.
### What was a popular business trend in the late 1980s?
- [x] Conglomerates breaking up
- [ ] Acquiring startups
- [ ] Hiring more middle managers
- [ ] Using memes in marketing
> **Explanation:** In the late 1980s, large conglomerates became unfashionable
### What's the diagrammatic representation of a demerger?
- [x] Company splits into independent units
- [ ] Independent units merge into a conglomerate
- [ ] Companies collaborate but remain independent
- [ ] Employees playing Monopoly
> **Explanation:** A demerger often involves splitting company activities into separate entities.
### Why might companies opt for a demerger?
- [ ] To improve efficiency
- [x] To confuse their competitors
- [ ] For better focus
- [ ] For improved value creation
> **Explanation:** Demerger allows companies to zero in on their market, operate independently, and potentially create more shareholder value.
### BHP spun off which company?
- [ ] PayPal
- [x] South32
- [ ] Google
- [ ] Amazon
> **Explanation:** BHP Billiton demerged to create South32 focusing on certain base metals.
### Which two companies demerged into independent digital prodigies?
- [x] eBay & PayPal
- [ ] Google & Amazon
- [ ] Apple & Microsoft
- [ ] IBM & Intel
> **Explanation:** eBay allowed PayPal to become independent focus handling online payments.
### Which component is not part of a demerger calculation?
- [ ] Conglomerate
- [ ] Independent Units
- [x] Mergers
- [ ] Freed Potential
> **Explanation:** Demerger involves breaking up, not merging companies.
### What's another term used for subsidiaries sold off in a demerger?
- [ ] Offshoots
- [x] Spin-offs
- [ ] Debt instruments
- [ ] Side hustles
> **Explanation:** Subsidiaries sold off in a demerger may be referred to as spin-offs.
