Understanding a demerger process: The divorce metaphor

Roger Schweizer and Katarina Lagerström

Scandinavian Journal of Management, 2020, vol. 36, issue 1

Abstract: This article contributes to the literature on mergers and acquisitions that hitherto has neglected the demerger of previously merged/acquired firms by offering a process description. To provide structure and deliver insights into such a process, we apply the metaphor of a divorce process and use insights from a case study—namely, the demerger between Ford Motor Company and Volvo Cars Corporation. Our findings suggest that a demerger process of previously merged/acquired firms can be divided into six phases: disillusionment, erosion, detachment, physical separation, mourning, and second adolescence/hard work. The motives for the initial merger or acquisition and the degree of integration are possible factors argued to play a major role in the identified phases during the demerger.

Keywords: Demerger process; Divorce; Metaphor (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1016/j.scaman.2020.101095

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