Yesterday, I attended a conference by an economics professor. It was about a game theoretical analysis of how companies carry out divestitures (selling off assets, branches or business units). A very interesting part was a motivation for why you'd sell a business unit: organizational gains. It might be better for the parent company, because the unit incurs costs on the parent, not just money but also taking time away from the executive team. The unit itself might also be better off as independt, because the parent incurred costs on it - it was slow making decisions because there were additional management layers on top as decisions had to go to the parent company, and this also reduced motivation in the unit's executive team as they didn't feel responsible for what happened. In fact, studies show a conglomerate effect - large companies are typically valued 12-15% less on the stock market compared to the expected worth of the company listed as individual units! There was also a lot about information asymmetry - for example, management buy-outs typically performed incredibly well, presumably because the unit executives knows the potential better than the parent's executives, and much better than any other buyer. Again, when a unit is undervalued in the market and internally, the best price and value add, for both buyer and seller, is to divest it. All of this speaks towards the hypercorp model in EP. Of course, there are industrial gains which gives good reasons for already big companies to grow and/or acquire companies - economies of scale, synergies, etc. - and today this means that often an industrial buyer is the one willing to pay the most for the unit*. But if advanced production methods make economies of scale irrelevant, and a highly networked business environment means you can just as well achieve synergies through that, then you're left with no real advantages in being big, only disadvantages. * Interestingly enough, it turns out that low performing units tend to sell for cash, while high performance units tend to sell for stocks in the buyer's company. Again, a networked structure with joint operations.