In a de-merger, which description of the components is accurate?

In a de-merger, which description of the components is accurate?

• A. De-merged components are owned by different organizations
• B. De-merged components are still owned by the same organization but managed independently
• C. De-merger merges components into a single entity
• D. De-merger eliminates the need for management

Answer: (B)

A de-merger creates separate, standalone entities from parts of a business, but the ownership remains with the same shareholders. This means each demerged component operates as its own company with its own management and board, even though the underlying ownership structure stays within the same group of owners. That combination—independent management for each component while ownership stays with the same organization—is what makes this description the best fit. The other ideas push toward different ownership (completely new owners) or toward merging back into one entity, or removing the need for management, which don’t reflect how a de-merger actually works.

A de-merger creates separate, standalone entities from parts of a business, but the ownership remains with the same shareholders. This means each demerged component operates as its own company with its own management and board, even though the underlying ownership structure stays within the same group of owners. That combination—independent management for each component while ownership stays with the same organization—is what makes this description the best fit. The other ideas push toward different ownership (completely new owners) or toward merging back into one entity, or removing the need for management, which don’t reflect how a de-merger actually works.