tag:blogger.com,1999:blog-8152901575140311047.post9111175035348705629..comments2024-03-19T05:19:06.448-04:00Comments on Musings on Markets: HP's Break Up : Value Enhancement, Pricing Game or Management Hype?Aswath Damodaranhttp://www.blogger.com/profile/12021594649672906878noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-8152901575140311047.post-90999646170446474112014-11-17T13:32:18.022-05:002014-11-17T13:32:18.022-05:00Both business separated could be easier to manage,...Both business separated could be easier to manage, achieving better margins and growth rates in the long term, even with bigger management expenses.<br />If the bottom line is positive, the market will consider the break up positive too.Anonymoushttps://www.blogger.com/profile/07209741974547463543noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-68975050835337296812014-11-02T14:15:44.282-05:002014-11-02T14:15:44.282-05:00Skeptical about HPs cost savings arguments. Two co...Skeptical about HPs cost savings arguments. Two companies will need two of everything - HR department/ and the like and there may be some reductions in economies of scale.<br /><br />Better pricing by market also looks doubtful for the reasons you cite. This argument has also been used by CEOs of companies like Pfizer... But there at least the cash flows from their generic products are steady and the risk and reward for research driven products is much more volatile.<br /><br />Still a split may create some value in the end. Both businesses will be smaller and easier to run and manage. Each segment may get more focus and attention as independent companies than in a confused conglomerate. Long odds for sure but better odds than cost savings or more accurate pricing by the marketAnonymousnoreply@blogger.com