Corporate break-ups: spin cycle
Recent examples of divisions being split off by big businesses should raise questions for long-term investors
✒ “A 2018 study from S&P Global suggests spun off companies do outperform. Businesses within the same industry as the parent generated impressive cumulative outperformance of almost 30 per cent over a three-year period. However, parent businesses typically produced returns that lagged behind the market by 10 per cent.”