There’s an interesting article over at the New York Times about Cendant breaking up (Cendant, Business Conglomerate, Announces Radical Breakup) that is definitely worth reading. In an era of big companies constantly striving to multiply their girth (exponentially it seems), Cendant is making a radical move to do the opposite.

Cendant, the $18 billion conglomerate that was built through the acquisitions of dozens of the nation’s most prominent businesses like Century 21, Avis, Days Inn and Orbitz, is planning a radical breakup into four different companies.

The move, which company announced today, is perhaps the most vivid acknowledgment that the latest era of conglomerates built through mergers and acquisitions may be over.

Under the plan approved by Cendant’s board Sunday, the company will be divided into four parts - one each for Cendant’s real estate, travel distribution, hospitality and vehicle rental businesses. Each unit will be spun off into a separate publicly traded company. Current Cendant shareholders will receive shares in each and will continue to receive dividends. For customers and employees, the change should mean little, at least in the near term.

You could argue, though, that splitting an $18 billion company into four leaves us with… 4 huge conglomerates still. Even so, it’s an interesting step forward.

TAGS: Cendant | Conglomerate | Merger | Business

This entry was posted on Monday, October 24th, 2005 at 7:22 am and is filed under Business Strategy, Interesting News. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.