The Corporate Sell-Off
10 Pages Posted: 19 May 2006
Abstract
This article reviews a variety of financial economic hypotheses that may explain the sale of corporate assets and discusses the relevant empirical evidence regarding corporate divestitures. Two explanations are stressed: diseconomies to the seller and economies to the buyer. The article also examines several phenomena related to sell-offs, such as their relation to prior mergers, the presence or absence of reported sales prices, differences between voluntary and involuntary sell-offs, and the announcement effects.
Keywords: sell-offs, divestitures, synergy, mergers
JEL Classification: G30, G34
Suggested Citation: Suggested Citation
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