Interesting! You must have graduated from the same MBA school as those running today's companies.
Same school, different thinking.
Most seem to go after M&A activities that are hoping for some magic "added value" by combining businesses.
In reality, most merged companies lose value due to compromises made in the name of synergizing operations, bloated management structure, and such.
Look at the history of mergers vs. spin-offs. One side has a long record of "bad deals", and it is not the spin-off side.
If company A+B sells B to company C then I think you'd end up with company A and company C+B. Correct me if I'm wrong but I think that's still two companies.
Maybe maybe not. You are assuming purchase by an ongoing enterprise. I would think a spin-off or purchase by an investment company is much more likely.
However if company A+B spins off a profitable division B as an independent company in order to raise money to support division A which is loosing money, then company A is now a company without a division that is profitable.
But now they are free of both the debt and can focus on there (now more narrowed) business.
This does not guarantee success, but given the choice of being in a market carrying a lot of debt and constantly being "distracted" by management trying to "find synergy" with the other division,
or,
being in the same market with the same standing being relatively debt free, and having a the focused attention of the management team.
Well you make the choice which you would buy stock in, work for, or but products from?
But company B is now a company without the burden of a money loosing division.
Yep, free to grow on its own profits, and hopefully sold at a value that reflects that potential.
It won't make any difference who has naming rights.
I agree, but too many managers get tied up in ego issues.