Split up or not? There is no off-the-shelf answer

ITC gave in to shareholder pressure and hived off its hotels business. But many conglomerates have successfully shrugged off persistent investor calls to focus only on their 'core competence'

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Activist shareholders have revived the 'core competence' debate and are targeting conglomerates to get more out of their businesses. Heeding long-standing shareholder demands, the management of ITC Ltd has finally carved out its hotels business into a separate entity. This demerger is expected to unlock some value for the ITC scrip, given that the hotel division's capital appropriation from the company's cash flows was disproportionate to its contribution to the total revenue pie. While ITC has succumbed to shareholder pressure after years of resisting calls for a split-up, discovery of the true value of ITC shares is still some distance away; even after the hive-off, ITC still retains conglomerate characteristics, with consumer goods, its agribusiness and paper division co-existing with tobacco products. Unilever is another conglomerate faced with break-up pressure from restive shareholders. This multinational has achieved top-line growth over the decades through a string of mergers and acquisitions. It now has an eclectic portfolio of near