Not too long ago the prevailing corporate buzzword was "synergy." Combine one business with another, eliminate redundancies, and watch the profits accumulate. Not all mergers would succeed, of course, but two heads would usually prove better than one, particularly at companies where revenue and innovation had stagnated.
In 2011, however, a growing number of large companies are challenging the synergy gospel by spinning pieces of their business off into independent entities. Earlier this week, Abbott Laboratories (ABT) announced plans to split into two separate companies next year. Twenty companies listed on the New York Stock Exchange or Nasdaq announced spinoffs through early October, including such well-known names as Kraft (KFT), ConocoPhillips (COP), Expedia (EXPE), McGraw-Hill (MHP), and Sara Lee (SLE). That compares with just 13 such spinoffs in all of 2010, and only 12 in all of 2009, according to data analysis firm CapitalIQ.
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