Value Creation from Equity Carve-Outs
Financial Management, Vol. 31, No. 1, Spring 2002
Posted: 6 Mar 2002
Using a large sample of equity carve-out events during the 1980s and 1990s, we find that rivals of carve-out parent firms display negative announcement-period returns. This finding distinguishes the divestiture gains hypothesis from the asymmetric information hypothesis. Additional tests provide further support for the divestiture gains hypothesis. Operating performance improvements for both parents and their carved-out subsidiaries are evident.
Suggested Citation: Suggested Citation