Breaking up is back in favour. Recent examples in the US
include ITT, Motorola, Fortune Brands, Marathon Oil,
Genworth, Sara Lee and just recently, EL Paso. The
results have generally been quite positive. For example,
ITT's shares jumped 11% on the breakup announcement,
creating roughly $1B in value. This leads to two
interesting questions: Do pure plays really outperform
diversified companies over time? Why did the market
value of the same ITT people, assets, products and
customers increase by $1B simply by announcing the
breakup of the company? pdf 2011
