The performance effects of European demergers

Kirchmaier, Thomas ORCID: 0000-0002-8938-2206 (2003) The performance effects of European demergers. CEPDP (566). London School of Economics and Political Science. Centre for Economic Performance, London, UK. ISBN 0753016265

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Abstract

This paper examines security price reactions of European demergers. For a period ranging from one and a half years prior to the demerger announcement through to three years after the execution date, the relative performance of the parent, spin-off and the combined effect is analysed relative to the overall market performance. Significant announcement effects were established for a sample of 48 European demergers. In addition, significant positive long-term value creation, in particular in year 2 after the demerger, was found for the spin-off but not for the parent firm. While size has, on average, a decisive but inverse impact on performance for both parent and spin-off, takeover activity does not.

Item Type:	Monograph (Discussion Paper)
Official URL:	http://cep.lse.ac.uk
Additional Information:	© 2003 Thomas Kirchmaier
Divisions:	Financial Markets Group Centre for Economic Performance
Subjects:	H Social Sciences > HD Industries. Land use. Labor
Date Deposited:	28 Jul 2008 15:31
Last Modified:	09 May 2025 00:45
URI:	http://eprints.lse.ac.uk/id/eprint/20047

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