Demergers were an American invention of the 1920s and started gaining wider popularity in the 1950s. Corporate demerger is one of several ways through which a firm splits its divisions into separate entities. In simpler words, it is the process by which businesses improve their focus on other core areas. A demerger is a pro-rata distribution of the shares of a firm‘s subsidiary to the shareholders of the firm, and many companies choose demerger as the next phase of development.
