Salary.com (2009) found that despite the sinking economy, 57 % of U.S. employees will increase their search for a new job in the next three months. They also reported that it costs approximately twenty-one thousand dollars to replace an employee due to turnover, across industries. Thus, for half a century, research has been conducted to better understand voluntary turnover in organizations. Given the sharp rise in merger and acquisition activity in organizations over the past two decades, it is important to understand the reasons for voluntary turnover among employees facing the uncertainty typically experienced during a merger or acquisition. The current study examined the psychological perceptions of employees who voluntarily left a major multi-conglomerate firm during a period of time where a division of the company was placed up for sale. Seventy-four archival exit interview surveys were obtained, and information coded in order to describe the types of reasons why employees left, the relative frequency and numbers of these reasons, the relations among supervisor and job satisfaction and various turnover reasons, and possible retention factors. Turnover reasons were grouped into five types: nonwork, job/task, work/unit, company and motivation. Findings show company reasons were the most frequently cited reasons for leaving and that career opportunities were the most highly cited as possible ways employees could have been retained. Supervisor satisfaction was inversely related to the number of job, work, and company reasons for leaving, and the reasons for leaving differed between employees reporting high and low levels of supervisor satisfaction. Findings are intended to provide insight about the perceptions of employees going through a merger or acquisition in order to better equip businesses who are losing star employees and facing tremendous costs in training new employees during a divestiture.

by Chan Ping Cheung, Fung Hon Cheung. / Thesis (M.B.A.)--Chinese University of Hong Kong, 1998. / Includes bibliographical references (leaves 64-66). / ABSTRACT --- p.ii / TABLE OF CONTENTS --- p.iii / PREFACE --- p.v / Chapter / Chapter I. --- INTRODUCTION --- p.1 / Our Approach --- p.2 / Chapter II. --- METHODOLOGY --- p.3 / Steps --- p.3 / Chapter III. --- MAJOR BUSINESS OF CHEUNG KONG (HOLDINGS) LIMITED / PRIOR TO THE SPIN-OFF --- p.5 / Genera] Description --- p.5 / Major Lines of Business --- p.7 / Chapter IV. --- ANALYSIS OF FINANCIAL POSITION OF CKH --- p.14 / Other Financial Obligations --- p.15 / Chapter V. --- FUNDING STRATEGIES --- p.18 / Chapter VI. --- THE WHOLE STORY OF CKI'S SPIN-OFF --- p.20 / Chapter VII. --- MARKET COMMENTS ON CKI'S SPIN-OFF --- p.23 / Chapter VIII. --- THE MAIN REASON FOR CKI'S SPIN-OFF --- p.27 / Chapter IX. --- OTHER MANAGERIAL PURPOSES AND INCENTIVES OF CKI'S SPIN-OFF --- p.31 / Chapter X. --- POSSIBLE DISADVANTAGES OF SPIN-OFF --- p.34 / Chapter XI. --- THE SHARE PRICE PERFORMANCE OF CKI --- p.36 / Chapter XII. --- CONCLUSION --- p.41 / APPENDIX / Chapter I. --- ANALYSIS OF SPIN-OFFS --- p.42 / Chapter II --- BUSINESSES & HIGHLIGHTS OF CKI --- p.44 / Chapter III --- CHEUNG KONG GROUP STRUCTURE CHART --- p.48 / Chapter IV --- LEGAL ASPECTS OF SPIN-OFF --- p.49 / Chapter V --- HISTORY OF CKH --- p.51 / Chapter VI --- CHINA-CONCEPT IPOS --- p.53 / BIBLOGRAPHY --- p.54

In the first essay titled "Divestitures and Acquisition Probability", I examine the relationship between a firm's divestiture activities and the likelihood that the firm will become an acquisition target. Using a logit model comparing a sample of target firms matched with a sample of non-target firms from 1986 to 2010, we find that a firm is 27 percent more likely to be acquired within three years of a divestiture activity than if there was no previous divestiture, and the effect is stronger for firms with fewer numbers of segments. Our finding is robust to modifications of control variables, to managerial entrenchment, as well as to alternative diagnoses. Consistent with the literature, we find the market reacts positively to a divestiture announcement. However, cross-sectionally we find the market reaction is positively related to whether or not the divesting firm adopts a golden parachute feature and negatively on the firm's number of segments which is related to the probability of future acquisition. In the second essay titled "The Choice of Divestiture and Long-run Performance: Asset Sell-off versus Equity Carve-out," I examine the post-divestiture long-run performance of two different choices of corporate divestiture, asset sell-offs versus equity carve-outs, and find that the choice of divestiture method has important implications for post-divestiture long-run performance. My findings show that the sell-off parents' long-run abnormal returns are significantly higher than those of the carve-out parents. I also find evidence that the long-term abnormal performance improves with a reduction in the diversification discount. The effect of the diversification discount is weaker for divesting parents with higher levels of R&D. My results further show that a firm's pre-divestiture number of segments and level of asymmetric information are positively related to the probability of an asset sell-off.

Because of the non-recurring and transitory nature of discontinued operations, accounting standards require that the results of discontinued operations be separately reported on the income statement. Prior accounting literature supports the view that discontinued operations are non-recurring or transitory in nature, and also suggests that income classified as transitory has minimal relevance in firm valuation. Finance and management literature, however, suggest that firms discontinue operations to strategically utilize their scarce resources. Assuming that discontinued operations are a result of managerial motives to strategically concentrate resources into remaining continued operations, this dissertation examines the informativeness of discontinued operations. In doing so, this dissertation empirically tests the financial performance, investment efficiency, valuation, and analyst forecast accuracy effects of discontinued operations. In 2001, Financial Accounting Standards Board's (FASB) Statement of Financial Accounting Standards (SFAS) 144 (hereafter SFAS 144) replaced Accounting Principles Board's Opinion 30 (hereafter APB 30) and broadened the scope of divestiture transactions to be presented in discontinued operations. Some stakeholders of financial statements argued that discontinued operations were less decision-useful in the SFAS 144 era because too many transactions that do not represent a strategic shift in operations were separately stated as discontinued operations on the income statement. With the possibility that the discontinued operations reported in SFAS 144 era may not reflect a major strategic reallocation of resources, this dissertation examines whether the relationship between discontinued operations, firm performance, investment efficiency, and analyst forecast accuracy are different in the pre-SFAS 144 and SFAS 144 era. Using a sample of firms that discontinued operations between 1990 and 2012, this dissertation study finds limited evidence that firms experience improvement in financial performance following discontinued operations and that such improvement is only observed in pre-SFAS 144 era. The results also suggest that any improvement in financial performance documented is conditional on the profitability of the operations discontinued and provide no support for investment efficiency improvement following discontinued operations. Related to the valuation implications of discontinued operations, this dissertation shows that investors differentially value profitable and loss discontinued operations. However, such valuation differences are not dependent on the performance improvement implications. Finally, results support that analyst forecast accuracy of earnings decreases following the reporting of discontinued operations, but such effect is only observed in the pre-SFAS 144 era. This dissertation makes several contributions to the literature. First, this study extends the literature on corporate divestment by using a large sample of discontinuation decisions and hand-collected data on the profitability of the operations discontinued. Second, this research extends the literature on market studies by analyzing whether market response to a discontinuation decision is dependent upon the profitability of the operation discontinued. Third, based upon a review of the literature, it is believed that this is the first study to examine the possibility that analyst forecast accuracy may change following a discontinuation decision. Finally, this study extends the literature that examines the effects of changes in accounting rules and regulations on the informativeness of financial statement items. These results should be of interest to investors, regulators, and analysts.

Divestitures have grown in importance and popularity over the years, rivaling other strategic transactions in mergers and acquisitions. The dominating opinion in academic research is that divestitures overall generate an abnormal return for the parent company stock. This thesis will focus on how Swedish companies perform in the short-term around the announcement of a divestiture. A multiple linear regression analysis finds significance for divestiture gains being attributed to companies focusing on core competencies and to companies with low returns on assets and high returns on equity. However, no significance is found for the size of the companies or financial distress. / Avknoppningar är idag en populär företagstransaktion. Den dominerade åsikten i den globala forskningen kring avknoppningar gör gällande att de generar en överavkastning för företaget i förhållande till marknaden. Denna kandidatuppsats ämnar undersöka vilka faktorer som kan påverka denna överavkastning genom att studera svenska företag på Nasdaq Stockholm. En multipel regressionsanalys visar att företag som säger sig utföra avknoppningar för att fokusera på kärnverksamheten generar en överavkastning. Vidare blir det en överavkastning på företag som har låg avkastning på totalt kapital och hög avkastning på eget kapital. Ingen verkan hittas dock för att storleken på företaget eller skuldstrukturen har en inverkan på överavkastningen.

In this thesis current questions regarding the functionality of liberalized electricity markets are studied addressing different topics of interest in two main directions: market power and competition policy on electricity wholesale markets, and network investments and incentive regulation. The former is studied based on the case of the German electricity market with respect to ex-post market power analysis and ex-ante remedy development. First an optimization model is designed to obtain the competitive benchmark which can be compared to the observed market outcomes between 2004 and 2006. In a second step the horizontal breaking up of dominant firms (divestiture) is simulated applying equilibrium techniques (the classical Cournot approach and the Supply Function Equilibrium approach). The later issue of transmission capacity investment is addressed by highlighting the complexity of network investments in electricity markets and by analyzing a regulatory mechanism with a two part tariff approach. The technical characteristics of power flows are combined with economic criteria and tested for different network settings.

Thesis (Ph. D.)--University of Texas at Austin, 2006. / Vita. Includes bibliographical references.

Made available in DSpace on 2015-12-04T11:45:12Z (GMT). No. of bitstreams: 1 Mauro_Fernando_Gallo.pdf: 1955869 bytes, checksum: ae2de252f340b3da6adc7d24bdc3d4c3 (MD5) Previous issue date: 2002-10-24 / The participation and importance of the business combinations through the consolidation, merger and spin-off operations have been increasing in the present context of the world economy. This fact is occurring also in Brazil, mainly due to the world changes that have been causing the competition increasing. This importance is due to not only the transaction quantities but mostly because many times the values involved are extremely high. It is not possible to say it is only a business concentration phenomenon: there are several reasons for the realization of these transactions, with a crescent utilization to reduce effectively the tributary charge assessed to the companies. In Brazil, the utilization of these operations started due to some tax advantages offered by the Federal Government. In 1971, it was created the Comiss?o de Fus?o e Incorporac?o de Empresas - COFIE, a commission connected to Ministry of Finance, in order to coordinate and analyze these tax advantages. The merger transactions were regulated for a long time past, but the spin-off transaction was inserted in the Brazilian legislation only in 1976, through the federal Law nr. 6404/76, known as Lei das S/A - the corporation acts. With this legal regulation, the utilization of the business company combinations has increased in spite of the Brazilian concept differences in relation to the United States of America and Europe ones. It is the case, for instance, of the merger, that they consider as a special type of consolidation. The professionals that work in tributary planning, that is, attorneys, accountants, managers and economists, amplified the business company combination use in Brazil, mainly merger and spin-off, due to the tax advantages reached through the Income Tax reduction, elimination or postponement, for several reasons. The main point of this study is the accounting and tributary ones to show the employment of these operations to substitute the acquisitions, aiming mainly the elimination of the capital gain of the stockholders, being an individual person or a company. The objective of this study was confirmed by the searches: this way of using the business company combination causes problems in the areas of law and accountancy, because in Brazil people are more connected to the juridical way of the fact than the economic one. So it may be concluded that the accountancy and the law professionals have many things to search and develop to improve and differentiate the types of transactions - those involving companies that have the same corporate control and those involving companies pertaining to different economic groups, explaining also the method differences used in the accountancy registers. / As reorganiza????es societ??rias atrav??s dos institutos da fus??o, incorpora????o e cis??o v??m tendo sua participa????o e import??ncia ampliadas no cen??rio atual da economia mundial, inclusive no Brasil, principalmente devido ?? globaliza????o e ao crescimento da concorr??ncia. Essa import??ncia deve-se n??o apenas ao quantitativo de opera????es, mas tamb??m ao fato de que os valores envolvidos muitas vezes s??o bem elevados. Tamb??m n??o se pode afirmar que ?? apenas um fen??meno de concentra????o empresarial: h?? in??meras e variadas raz??es para a efetiva????o dessas opera????es, com sua crescente utiliza????o como forma de redu????o do ??nus tribut??rio aplicado ??s empresas. No Brasil, o emprego dessas opera????es foi implementado utilizando-se alguns benef??cios fiscais concedidos pelo Governo Federal; criou-se em 1971 a Comiss??o de Fus??o e Incorpora????o de Empresas - COFIE, ligada ao Minist??rio da Fazenda, com a finalidade de coordenar e analisar a concess??o desses benef??cios fiscais. A fus??o e a incorpora????o j?? eram devidamente regulamentadas h?? um bom tempo, mas a cis??o somente foi introduzida na legisla????o brasileira atrav??s da Lei das Sociedades An??nimas, em 1976. Com isso, ampliou-se a utiliza????o de tais institutos, apesar de em nossa legisla????o societ??ria e fiscal haver algumas diferen??as conceituais em rela????o aos Estados Unidos e Europa: ?? o caso da incorpora????o, que l?? ?? considerada como um tipo especial de fus??o. Os profissionais que operam com planejamento tribut??rio, sejam advogados, contadores, administradores e economistas, ampliaram o emprego principalmente da incorpora????o e cis??o no Brasil devido ??s vantagens fiscais alcan??adas atrav??s da redu????o, elimina????o ou posterga????o de Imposto de Renda, por diversas raz??es. O foco principal deste estudo compreende as ??reas cont??bil e tribut??ria, com o fim de demonstrar o emprego dessas opera????es em substitui????o ??s de aquisi????o, visando principalmente a elimina????o do ganho de capital dos acionistas ou quotistas, sejam pessoas f??sicas ou jur??dicas. Conforme era o objetivo do estudo, pelas pesquisas desenvolvidas confirmou-se tal utiliza????o, provocando essa forma de emprego distor????es tanto no campo jur??dico como nos procedimentos cont??beis adotados, vez que no Brasil preocupa-se mais com a forma jur??dica do que com a econ??mica dos fatos. Isso leva a concluir que tanto os profissionais da contabilidade como os do direito t??m muito a pesquisar e desenvolver para aperfei??oar e distinguir essas opera????es, tanto as ocorridas entre empresas sob o mesmo controle societ??rio quanto entre as pertencentes a grupos econ??micos distintos, clarificando inclusive as diferencia????es dos m??todos adotados nos registros cont??beis.

This research has investigated the long-run performance of corporate restructurings through unbundling transactions on the JSE between 2000 and 2012. The corporate unbundling transactions considered by the research are spin-offs and sell-offs. From the two unbundling transactions, four samples were derived, that is, 21 spin-offs, 14 parent-spin-offs, 14 sell-offs and 20 parent-sell-offs. The share price performance of these samples was investigated by a matching firm methodology under the buy and hold abnormal returns. The research found that positive abnormal returns are present for both samples for up to four years after unbundling. Secondly, with the exception of parent-sell-offs, significant abnormal returns were experienced by both samples for up to four years after unbundling. It was also found that a spin-off is a preferable corporate unbundling strategy to a sell-off over a long-run period. This research implies that companies with heavy structures should unbundle in order to unlock shareholders’ value. / Business Management / M. Com. (Business Management)

In this thesis current questions regarding the functionality of liberalized electricity markets are studied addressing different topics of interest in two main directions: market power and competition policy on electricity wholesale markets, and network investments and incentive regulation. The former is studied based on the case of the German electricity market with respect to ex-post market power analysis and ex-ante remedy development. First an optimization model is designed to obtain the competitive benchmark which can be compared to the observed market outcomes between 2004 and 2006. In a second step the horizontal breaking up of dominant firms (divestiture) is simulated applying equilibrium techniques (the classical Cournot approach and the Supply Function Equilibrium approach). The later issue of transmission capacity investment is addressed by highlighting the complexity of network investments in electricity markets and by analyzing a regulatory mechanism with a two part tariff approach. The technical characteristics of power flows are combined with economic criteria and tested for different network settings.