Acquisition of Divested Assets and Shareholders' Wealth

Neil W. Sicherman · Richard H. Pettway

118 citations0/0 files storedThe Journal of Finance

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Corporate Finance and Governance Financial Markets and Investment Strategies Financial Reporting and Valuation Research

Abstract

ABSTRACT The divesting of corporate assets has become quite popular. Previous studies of divestitures have found conflicting impacts upon shareholders' wealth of the buying firm. This study measures the impacts of product‐line relatedness between the acquiring firm and the divested unit and financial weakness of the selling firm upon the abnormal returns to the acquiring firm. Although the study finds that the impact of financial strength of the seller is ambiguous, the purchase of related assets produces more wealth than does the purchase of unrelated divested units. Further, firms that purchase related divested units have larger proportions of insider ownership.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 118 citations exist upstream.

References

1985Using daily stock returns 1981Risk Reduction as a Managerial Motive for Conglomerate Mergers 1974Strategy, structure, and economic performance 1975Strategy, structure, and economic performance 1980Financial Theory and Corporate Policy.1982Financial Theory and Corporate Policy.1985The Effect of Voluntary Sell-Off Announcements on Shareholder Wealth 1984Investigating the Valuation Effects of Announcements of Voluntary Corporate Selloffs

Cited by

1989Insider Trading, Ownership Structure, and the Market Assessment of Corporate Sell-Offs 1991Divisional sell‐off: A hazard function analysis 1992The effect of corporate divestments on shareholder wealth: The UK experience 2000Managerial ownership, board structure, and the division of gains in divestitures 2003The causes of mergers: tests based on the gains to acquiring firms' shareholders and the size of premia 2004Governance and Performance Implications of Diversification Strategies: Evidence from Large U.S. Firms

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.