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Why ICI Chose to Demerge

It would be difficult to find a better example of a large, diversified, multinational corporation that, by doing too many things, had created a mismatch between its role as a corporate parent and the needs of its businesses. Britain’s Imperial Chemical Industries (ICI) sought new sources of growth during the 1980s to offset the sluggish sales of its older products but, in the end, only increased the complexity of an already complicated and hard-to-manage portfolio of businesses. At the start of the 1990s, ICI, like other companies with a similar problem, faced the indignity of a takeover threat because the value of the best businesses it owned wasn’t reflected in the price of its stock.

A version of this article appeared in the March–April 1995 issue of Harvard Business Review.

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