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5 Not-So-Crazy Blue-Chip Spinoffs

For megacap stocks looking to unlock value, these massive breaks could do the trick

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Everyone has enjoyed speculating about buyouts over the past few years, as innovative “disruptors” have gained momentum and old leaders struggling for growth have embarked on expansion via acquisition.

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But let’s face it, more isn’t always more. Sometimes a company gets too unwieldy given its disparate businesses and the bureaucracy becomes too much to bear. Take 90-year-old conglomerate ITT Corp (ITT), which broke into three separate companies in 2011 to streamline things.

Or sometimes there are two very different companies operating under the same roof despite very different missions and models. Take Kraft (KRFT), the legacy North American grocery business, and international snacks company Mondelez (MDLZ), which parted ways in 2012 because of very different growth prospects and business styles.

While buyouts and acquisitions undoubtedly have potential by merging two businesses into one for increased scale and growth, spinoffs can unlock plenty of value, too.

So here are some not-so-crazy spinoff ideas we might see in 2014 as some big-name blue chips look to streamline operations and align strategy with structure:

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