Restructuring and Divestitures

Feldman, Emilie R.

doi:10.1093/oso/9780190090883.003.0009

Cited by 4 publications

(1 citation statement)

References 6 publications

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“…In analyzing recent studies on disinvestment in the energy industry, most focus on risk-adjusted returns and the impact of regulation, stock performance, and how investors should manage their portfolios (Choi et al, 2020;Feldman, 2021). Hunt & Weber (2019) pointed out that there are few studies focusing on the economic impact of fossil fuel phase-out and found in their analysis of the Canadian energy market that green energy portfolios can lead to higher returns.…”

Section: Current State Of Research and Research Questionsmentioning

confidence: 99%

Critical Analysis of Shareholder Benefits from Spin-Offs and Carve-Outs of Carbon-Intensive Businesses: A Study of the Energy Industry

Brune¹,

Harder²,

Klingenberger³

2023

OCS

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The energy trilemma is a significant challenge of our time, driven by advancing climate change, social and political changes, and the impact of the war in Ukraine. This has led to the traditional business models of the energy industry and utilities being challenged. Against the backdrop of environmental sustainability, energy security, and affordability, this paper examines whether German utilities can achieve greater sustainability while creating shareholder value by divesting their carbon-intensive businesses. The analysis of the spin-off of E.ON-Uniper and the carve-out of RWE-Innogy reveals positive impacts on shareholder value, corporate performance, and a higher share price of all four companies after the splits. One conclusion that can be drawn is that divesting carbon-intensive businesses might create value for the company and its shareholders. However, it is important to note that the analysis did not demonstrate any benefits in terms of improved ESG ratings due to divestment.

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Section: Current State Of Research and Research Questionsmentioning

confidence: 99%

Critical Analysis of Shareholder Benefits from Spin-Offs and Carve-Outs of Carbon-Intensive Businesses: A Study of the Energy Industry

Brune¹,

Harder²,

Klingenberger³

2023

OCS

View full text Add to dashboard Cite

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Do corporations benefit from divesting to private equity acquirers? An empirical investigation

Nary

2024

Strategic Management Journal

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Research SummaryFrom the perspective of the divesting firm, do divestitures to private equity (PE) acquirers perform differently from divestitures to corporate acquirers? If so, why? This question‐based, empirical study shows that on average, divestitures to PE acquirers correlate with lower divesting firms' shareholder returns than divestitures to corporate acquirers. The study explores whether these lower returns when divesting to PE acquirers are explained by the differences in PE acquirers' distinct value creation strategies when it comes to target selection, ownership, or transaction timing. The results reveal that divesting firms' lower shareholder returns when divesting to PE acquirers are more likely correlated with differences in value creation by PE acquirers due to their distinct ownership and transaction timing strategies, but not their selection strategies.Managerial SummaryPrivate equity (PE) firms are prominent buyers of corporate divestitures, and PE firms' strategies for creating value when acquiring divested businesses tend to differ from those of corporate buyers. Yet the performance implications, from the perspective of the divesting firm, of divesting a business to a PE acquirer versus a corporate acquirer are not clear. In this study, I explore the differences in returns to firms divesting to PE acquirers versus those divesting to corporate acquirers. First, on average, divesting firms' returns are lower when divesting to PE acquirers. Second, these lower returns are more likely to occur when the PE acquirer may be expecting to create less value, or when firms choose to divest at a suboptimal time.

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Diversification as an adaptive learning process: an empirical study of general-purpose and market-specific technological know-how in new market entry

Randle,

Pisano

2023

Industrial and Corporate Change

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An enduring trait of modern corporations is their propensity to diversify into multiple lines of business. Penrosian theories conceptualize diversification as a strategy to exploit a firm’s fungible, yet “untradeable,” resources and point to the redeployment of technological know-how as an important driver thereof. However, less understood are the characteristics of technological assets that underlie firms’ diversification decisions and the impact that diversification has on firms’ subsequent development of technologies. In this paper, we expand the existing theories in two ways. First, we argue that central to understanding firms’ diversification decisions is a distinction between their technological assets that are applicable to many markets and ones that are useful in only a limited number of contexts. To this end, we develop a novel way to characterize technologies along a continuum from highly general-purpose to highly market-specific. Second, we explore empirically the idea that diversification is an adaptive learning process involving both the exploitation of existing capabilities and the creation of novel ones. Using data on three decades of patenting and diversification histories of 28,376 firms, we find that (i) a firm’s possession of general-purpose technological assets is positively associated with its decision to diversify and (II) firms that enter a new industry through diversification develop technologies that are specialized to the target industry. Our findings have implications for understanding firm growth, diversification, and evolution.

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Restructuring and Divestitures

Cited by 4 publications

References 6 publications

Critical Analysis of Shareholder Benefits from Spin-Offs and Carve-Outs of Carbon-Intensive Businesses: A Study of the Energy Industry

Critical Analysis of Shareholder Benefits from Spin-Offs and Carve-Outs of Carbon-Intensive Businesses: A Study of the Energy Industry

Do corporations benefit from divesting to private equity acquirers? An empirical investigation

Diversification as an adaptive learning process: an empirical study of general-purpose and market-specific technological know-how in new market entry

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