2. Spin-off - a company distributes on a pro rata basis all the shares it owns in a subsidiary to its own shareholders .... the result is two or more public corporations ... no money changes hands ... subsidiary's assets are not revalued ... transaction is tax-free and is treated as a stock dividend.
3. Split-ups - two or more new companies come into being in place of the original company..usually accomplished by spin-offs.
4. Equity carve-outs - some of the subsidiary's shares are offered for sale to the general public.
5. Split-offs - some bpt not all of the parent company's shareholders
receive the subsidiary's shares in return for which they must relinquish
parent company shares.
2. Abandoning the core business (B.F.Goodrich).
3. Change in corporate strategy (Allegis - UAL)
4. Adding value to the firm by selling into a better f it (Dow Jones).
5. Too large an additional investment required (Gould).
6. Cashing in on past successes in order to strike out into new ventures (Hanson PLC).
7. Selling unwanted assets from prior acquisitions (Pullman)
8. Selling assets in order to take down some LBO debt (DuPont)
9. Downsizing by selling off a crown jewell to look like a less-desirable target (Brunswick).
10. A condition required for anti-trust purposes (Santa Fe)
11. An MBO of an operating division to some current management.
12. Means of f inancing another acquisition (Emerson Electric)
13. Admitting a mistake in a prior acquisition (Mobil)
14. After experience with the cnadidate, management determination that
it does not f it in with the long-range strategy of the company.
III. FINANCIAL EFFECTS OF DIVESTITURES