Journal of Banking & Finance Vol. 28 No. 5 2004
Do spin-offs really create value? The European case
Abstract
We study wealth effects for a sample of 156 spin-offs from 15 different European countries that were announced between January 1987 and September 2000. The cumulative average abnormal return over the 3-day event window is 2.62%. This number increases to 2.66% for the subsequently completed spin-offs. The cumulative average abnormal return is 3.57% for completed spin-offs by companies that increase their industrial focus and only 0.76% for non-focus increasing companies. The difference between these two sub-samples is significantly different from zero. These results are in line with previous studies for the US. The long-run returns in excess of matching firms are mostly insignificant for parents, subsidiaries and pro-forma combined firms. This result suggests that, unlike US spin-offs, European spin-offs are not associated with long-run superior performance.
- DOI
- 10.1016/s0378-4266(03)00045-1
- Volume
- 28
- Issue
- 5
- Pages
- 1111-1135
- Language
- en
- Sources
- openalex crossref bibtex:phds-export.bib