Restructuring Measures and Value Creation: The Cgg Case

Abstract

This paper chronicles the history of the CGG Company from its founding. CGG, an international provider of geophysical services and of software for seismic data interpretation and processing, faced important difficulties following an economic crisis and a failure in its diversification policy. This paper, in line with clinical studies of the Journal of Financial Economics, attempts both to highlight operational, organisational, strategic and financial responses to distress and to understand their influence on the value creation. This survey suggests that financial distress is not the only reason for restructuring measures taken by CGG. Although financial distress is the main cause of financial and disinvestment measures, its role is only indirect or neutral for the operational and organisational measures. Finally, our results suggest that the impact of each measure depends on its strategical visibility.

Keywords: Difficulty, restructuring, performance, value

JEL Classification: G34