Inter corporate asset sales provide a viable alternative to mergers and acquisitions to create shareholder value for both the buyer and seller companies. Intercorporate asset sales are defined as the sale of autonomous operational assets which does not entail a change in ownership control of the seller.Mergers and acquisitions research found greater value was created by cash funded transactions compared to equity funded transactions. Contrary to mergers and acquisitions, asset sale research found equity funded transactions created greater value compared to cash funded transactions. This research provides a deeper understanding of the effect the method of payment has on the value created when selling assets, enabling management of acquiring and divesting companies to realise their maximum value creation potential.The population consisted of intercorporate asset sale transactions announced and concluded for the 11 year period from 1 January 2000 to 31 December 2011. The exact population was not known, therefore judgmental sampling was used to identify companies. Only companies listed on the Johannesburg Stock Exchange All Share Index were considered for qualifying asset sale transactions. In total 112 companies were reviewed for asset sales yielding 214 qualifying transactions which were divided in sub samples of 43 equity buyers, 68 cash buyers, 30 equity sellers and 73 cash sellers.Based on the event study methodology the short term metric of abnormal share price returns and the medium term metric of abnormal operating financial performance were used to calculate and compare the value created by equity and cash funded transactions. Both metrics concluded that equity funded asset sales created greater value compared to cash funded asset sales.Inferences were made between asset sales and mergers and acquisitions and the researcher concluded by proposing a model to optimise shareholder value. Based on the accounting performance of the buyer and the intrinsic value of the asset or target, the model is used to select the optimum combination of corporate activity and the method of payment to unlock the optimum shareholder value. / Dissertation (MBA)--University of Pretoria, 2012. / Gordon Institute of Business Science (GIBS) / unrestricted

This thesis consists of three essays and studies CEO compensation, asset sales and takeovers and investment under uncertainty in empirical corporate finance. The first essay is a joint work with Qianqian Huang, Feng Jiang and Erik lie, titled `The effect of labor unions on CEO compensation'. The second essay `. Union Concessions following Asset Sales and Takeovers' is a joint work with Erik Lie. The third essay is titled `The Effect of Systematic and Idiosyncratic Risk on Investment and R&D' and is sole-authored. In the first essay, we document evidence that labor unions compel firms to curtail CEO compensation. First, we find that firms with strong unions pay their CEOs less. Further, firms curb CEO compensation, especially the part that is discretionary, prior to union contract negotiations. Finally, we report that curbing CEO compensation mitigates the chance of a labor strike, thus providing a rationale for firms to pay CEOs less when facing strong unions. In the second essay, we document that the likelihood of asset sales increases with union wages. Furthermore, the acquiring firms gain significant concessions from the incumbent union following asset sales. Finally, the anticipation of union concessions helps explain the excess stock returns around asset sale announcements. We find no comparable effects for takeovers. We conclude that asset sales, but not takeovers, are partially motivated by the potential to extract concessions from unions. Finally, in the third essay, in an attempt to shed some light on the puzzling positive sensitivity of investment to systematic volatility documented in Panousi and Papanikolaou (2012), we decompose systematic volatility into a firm's systematic risk exposure (beta) as well as the market and industry portfolio volatility. Surprisingly, we find a positive response of investment to a firm's systematic risk exposure. R&D expenditure is employed as an alternative form of investment. Our results show that idiosyncratic risk actually encourages firms to engage in R&D spending, in contrast with its depressing effect on capital expenditure; whereas systematic volatility depresses R&D in contrast with the positive sensitivity of capital expenditure to systematic volatility.

The aim is to legal, accounting and tax business analysis forms the transition from the individual to company with limited liability and choosing the best option based on the decision matrix for the company. On the base of theoretical frameworks derive recommendations for solving the problems of transition to individual limited liability company in practice.

La presente tesi di dottorato è composta da due capitoli indipendenti nei quali sono analizzate le ristrutturazioni aziendali e le politiche di investimento delle società quotate. Il primo capitolo esamina le motivazioni e gli effetti sul valore delle cessioni di asset che hanno luogo durante operazioni di acquisizioni. I risultati delle analisi condotte supportano l’ipotesi di efficienza delle ristrutturazioni associate ad acquisizioni e indicano che il 60% percento dei disinvestimenti avviene ad acquisizione completata. In media, questi disinvestimenti incrementano il valore creato con le acquisizioni dell’1.85%. In generale, la vendita di asset è uno strumento che facilita le acquisizioni e ne aumenta le sinergie. Il secondo capitolo studia l’impatto della diversificazione e della leadership di settore sulle politiche di investimento delle imprese durante periodi di contrazione. L’analisi suggerisce che le imprese diversificate non modificano significativamente il loro portafoglio di asset e adottano politiche d’investimento conservative, risultando in generale meno reattive agli shock. I risultati evidenziano l’assenza di strategie predatorie da parte delle imprese leader. Il vantaggio principale delle imprese diversificate e/o leader consiste nella possibilità di evitare vendite forzate durante crisi settoriali. Tuttavia, nonostante questo vantaggio, il mercato penalizza tali imprese per il loro comportamento passivo. / This dissertation consists of two independent essays that investigate corporate restructurings and the investment policy of listed firms. Chapter 1 studies the motives and the value effects of corporate assets sales that take place around acquisitions, providing support for the efficient restructuring view of acquisition-related divestitures. About 60% of these divestitures occur following the acquisition completion. On average, divestitures are associated with an increase of 1.85% in the value creation around focal acquisitions. Overall, asset sales are a tool to ease an acquisition and bolster the associated synergies. Chapter 2 studies how industry focus and leadership position within the industry impact the investment policy during industry downturn. I find that industry focus and leadership are important factors in explaining the firm’s investment decisions during downturns. Diversified firms are less responsive to shocks: they do not alter much their portfolio and adopt rather conservative investment behavior. I find no evidence supporting predation strategies by industry leaders during industry shocks. The main advantage of being diversified and/or leader consists in avoiding forced asset sales during downturns. Despite this advantage, the stock market penalizes industry leaders and diversified firms for their passive behavior.