Better off alone

eBye

EXAMPLES of failed technology mergers abound, but spin-offs have a better record. The coming months will provide plenty of evidence on why they can be worth it. Several big tech divorces are in the works, as firms try to position themselves to respond more adeptly to new challenges that arise from the growth of mobile and the cloud. First up is PayPal, a leading digital-payment service, which is to split from eBay, an e-commerce giant, on July 17th and will start trading as a separate company a few days later.

Just as divorces can cost more than getting married, spin-offs tend to be more complicated affairs than mergers, says Marco Sguazzin of Deloitte, a professional-services firm that has helped many firms to break up. In corporate marriages many things can only be decided after the deal is closed. In contrast, when firms split, everything needs to be settled up front: how assets will be divvied up, which employees will be on which payroll, how the IT systems will be disentangled, and so on. As a result, separation projects tend to be tedious affairs, keeping hundreds of people busy and costing hundreds of millions...

from The Economist: Business http://ift.tt/1LcGOs9