Is this the end of European conglomerates?

Is this the end of European conglomerates? The end may be in sight for European conglomerates. Activist investor Christer Gardell of Cevian Capital predicts a growing trend of “demergers” in the next five to seven years, due in large part to an increasing number of European conglomerates engaging in in spin-off transactions, or “spin-offs.” Generally, a spin-off refers to a transaction in which a parent company sells or distributes new shares of one of its business units, after which the business unit then becomes a new legally distinct and independent company. The use of spin-offs by conglomerates to “demerge” may suggest a recognition that the path forward requires an unbundling of operations, rather than consolidation. The growing list of spin-offs in Europe European conglomerates have been at the centre of spin-off rumours for some time. Recent behaviour suggests that such transactions are rising in popularity. Recent…

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