Cadbury Schweppes are going to demerge because it makes business sense. Any parallel with ending the Union? I should say so. The most practical one is that whatever Tony/Wendy/Jack say about the Scottish fiscal situation provides more rather than less reason for independence.
On the one hand the bigger the deficit, the greater the measure of failure of the UK as an economic unit.
On the other, all the figures they come up with are based on questionable assumptions and methodologies (see ‘calculators at dawn’ below) using historical costs which are therefore…er…historical. Going forward we will cut our cloth and our defence budget, olympics commitment etc, to fit our new circumstances. Sure there’s a challenge, but dependency is an appalling business model to build a future on.
Do you really think that Cadbury and Schweppes made the decision to demerge based on historical results? Well actually yes – because they recognise the merged business has been dysfunctional. Will their management teams just carve up the historic costs and revenues and project them forwards? Not a chance, the business prospect of demerger is the opportunity to release the suppressed energy of the constituent parts.