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The performance effects of European demergers

Kirchmaier, Thomas (2003) The performance effects of European demergers. CEPDP, 566. Centre for Economic Performance, London School of Economics and Political Science, 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
Library of Congress subject classification: H Social Sciences > HD Industries. Land use. Labor
Sets: Research centres and groups > Managerial Economics and Strategy Group
Research centres and groups > Financial Markets Group (FMG)
Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Collections > LSE Financial Markets Group (FMG) Working Papers
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: 566
Date Deposited: 28 Jul 2008 15:31
URL: http://eprints.lse.ac.uk/20047/

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