Cornell Hotel Case Studies：Continents_Final.pdfVIP

The Center for Hospitality Research AT CORNELL UNIVERSITY Six Continents De-merging for a better future? Introduction How would you choose to spend $3 billion? It may sound like an easy question, but it is one that the UK conglomerate Six Continents has been struggling to answer. The inability to make a decision has been a catalyst for change at Six Continents. Today, Six Continents is on the precipice of a major transformation. The failure to spend the $3 billion gained from the sale of their Bass Brewing business has culminated in a decision to return a portion of this capital to their shareholders. Additionally, Six Continents will begin the process of de-merging their hotel and soft drink business from their restaurant and pub business. Chairman Ian Prosser said, “over the past 5 years we have narrowed our business focus and have paid significant sums to our shareholders. The progression of this strategy is the separation of our hotels and soft drinks businesses from the retail business combined with a return of £700m ($1.1 billion). Our hotel and retail businesses are both very strong businesses with great potential.”1 In order to best understand Six Continents’ corporate strategy, it is essential to first understand the evolution of this conglomerate. Written by Adam Baru, Yinian Hou, Vikas Patel, Bill Spinnenweber, Anjali Talera and Kem Wilson under the direction of Jeffrey S. Harrison at the School of Hotel Administration, Cornell University. Copyright c Jeffrey S. Harrison. This case study was written for the purposes of classroom discussion. It is not to be duplicated or cited in any form without the copyright holder’s express permission. For permission to reproduce or cite this case, contact Jeffrey S. Harrison (jsh36@). Permission to use in the classroom will be granted free of charge.