The Urge To Demerge

EUGENE HOSHIKO/AP

Burberry is being spun off from GUS

Unshackled from their government moorings and given a remit to compete, many of Britain's utilities in the 1990s took the decade's "growth is good" mantra to heart and morphed into conglomerates. Some reached beyond their own sectors for opportunities, expecting to apply their management skills to marginally related businesses. That's how energy company Scottish Power ended up owning a water company, a telecom and 160 electronics shops, as well as hawking financial-services. But the expected "synergies" of such diverse companies never fully developed, and Scottish Power's earnings — as well as its share price — hit a brownout. So the Glasgow...

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