The performance effects of European demergers

Tom Kirchmaier ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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.

Keywords: Corporate restructuring; demerger; spin-off (search for similar items in EconPapers)
JEL-codes: J01 R14 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2003-05
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Citations: View citations in EconPapers (3)

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http://eprints.lse.ac.uk/20047/ Open access version. (application/pdf)

Related works:
Working Paper: The Performance Effects of European Demergers (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:20047

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