Altria Group: The Carve-Out and Spin-Off of Kraft

Eli Amir and Marco Ghitti ()
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Eli Amir: Tel Aviv University
Marco Ghitti: SKEMA Business School

Chapter Chapter 15 in Financial Analysis of Mergers and Acquisitions, 2020, pp 255-266 from Springer

Abstract: Abstract Following a spin-off and an equity carve-out new shares are traded in the public equity market. What is an equity carve-out? What is a spin-off? What common objectives do they have, and what differences? We provide insights to these questions by analyzing the case of Altria and Kraft. In addition, the case raises and provides feedback on the following questions: how did Altria and Kraft account for the carve-out and spin-off of Kraft in 2001 and 2007, respectively? Why did Altria carve-out just less than 20% of its ownership of Kraft in 2001? Why did it then spin-off its remaining interest in 2007? Finally, we address the issues of gain/loss recognition in spin-offs and carve-outs.

Keywords: Spin-off; Carve-out; Pro-rata distribution (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-61769-1_15

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DOI: 10.1007/978-3-030-61769-1_15

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