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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: 11 Dec 2024 18:34
URI: http://eprints.lse.ac.uk/id/eprint/20047

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