Australian divestiture activity: An examination of gains to sell-off announcements

Cooney, Mary Rose, Finn, Frank and Karl, Angela (2004) Australian divestiture activity: An examination of gains to sell-off announcements. Australian Journal of Management, 29 Supp. 1: 135-151. doi:10.1177/031289620402901S06

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Author Cooney, Mary Rose
Finn, Frank
Karl, Angela
Title Australian divestiture activity: An examination of gains to sell-off announcements
Journal name Australian Journal of Management   Check publisher's open access policy
ISSN 0312-8962
Publication date 2004
Sub-type Article (original research)
DOI 10.1177/031289620402901S06
Volume 29
Issue Supp. 1
Start page 135
End page 151
Total pages 17
Editor R. Marks
Place of publication Sydney
Publisher Australian Graduate School of Management
Collection year 2004
Language eng
Subject C1
340203 Finance Economics
720203 Industrial organisations
Abstract This study examines the source of gains associated with Australian divestiture activity, defined as a voluntary modification of the firm's productive assets by a sell-off of a complete operating division or wholly-owned subsidiary of the divesting firm The sell-off announcement produces positive average abnormal returns of 1.15% over the two-day announcement period. We conclude that the gains arise predominantly from divestitures that have a strategic focus as demonstrated by, first, the divested unit is unrelated to the firm's core activities (a strategic divestiture), second, the significance of the strategic variable in explaining the positive market reaction in regression analysis, and third, the finding of more significant results where the intended use of proceeds of the sell-off is for strategic purposes.
Q-Index Code C1

Document type: Journal Article
Sub-type: Article (original research)
Collections: Excellence in Research Australia (ERA) - Collection
2005 Higher Education Research Data Collection
UQ Business School Publications
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Created: Wed, 15 Aug 2007, 03:22:48 EST