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Understanding a demerger process: The divorce metaphor

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  • Schweizer, Roger
  • Lagerström, Katarina

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.

Suggested Citation

  • Schweizer, Roger & Lagerström, Katarina, 2020. "Understanding a demerger process: The divorce metaphor," Scandinavian Journal of Management, Elsevier, vol. 36(1).
    • Handle: RePEc:eee:scaman:v:36:y:2020:i:1:s0956522119300879
    DOI: 10.1016/j.scaman.2020.101095
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