The Old Mutual and Skandia demerger : Building commitment as a factor of success

Abstract: Increasing M&A activity has during recent years shown no indication of slowing down. Contrastingly the success rate of the M&A’s are still low, accordingly an increased frequency of demergers is a likely outcome. The demerger phenomenon has yet to reach the gaze of the academic community, where little is known surrounding the subject. This study takes a qualitative approach to try to understand the underlying reasons that drive a demerger process, and the factors that determine the success of a demerger process, through the lens of M&A literature. Our findings provide indications that the planning and execution of the disintegration and communication within a demerger correlates to demerger success. Furthermore, our contributions give indications that building employee commitment is an essential driver that enhances the possibility of a successful demerger.