Equity Carveouts, Agency Costs, and Firm Value

2005
ISBN: 978-3-8350-0092-6
Verlag: Deutscher Universitätsverlag

Buch, Englisch, 445 Seiten, Format (B × H): 148 mm x 210 mm, Gewicht: 605 g

Reihe: Entrepreneurship

Equity Carveouts (ECOs), the initial public offering of shares in a subsidiary of a group of companies, are a relatively frequent phenomenon on the German capital market. The success of such prominent transactions as the carveout of Infineon or T-Online has been controversially discussed in both practice and academia.

Lukas Junker examines if ECOs lead to a sustainable, long-term increase in firm value. His analysis is based on an agency perspective and ECOs are understood as an instrument of financing and reorganization that leads to a reconfiguration of the incentive structure in the groups of companies. In contrast to the dominantly positive assessment, results show that on the German capital market and on a long-term basis ECOs are associated with a deterioration of firm value. This can be mainly explained by a lack of independence of the subsidiary in the typical transaction: The reorganization is not beneficial, since most subsidiaries effectively remain part of the groups of companies with the holding company retaining a majority interest.

Zielgruppe

Research

Autoren/Hrsg.

Junker, Lukas

Weitere Mitwirkende

Brettel, Prof. Dr. Malte

Fachgebiete

• Wirtschaftswissenschaften Betriebswirtschaft Unternehmensfinanzen
• Wirtschaftswissenschaften Finanzsektor & Finanzdienstleistungen Börse, Rohstoffe
• Wirtschaftswissenschaften Finanzsektor & Finanzdienstleistungen Anlagen & Wertpapiere
• Wirtschaftswissenschaften Finanzsektor & Finanzdienstleistungen Unternehmensfinanzierung

Inhaltsverzeichnis

1 Introduction.- 1.1 Problem statement.- 1.2 Definitions.- 1.3 Motivation: The special interest in ECOs.- 1.4 Existing ECU research.- 1.5 Objective.- 1.6 Outline.- 2 Theoretical Foundations.- 2.1 Section outline.- 2.2 Theoretical foundations of corporate finance.- 2.3 Agency theory and its implications.- 2.4 Application of agency theory to empirical corporate finance.- 2.5 A two-dimensional agency framework for the analysis of ECOs.- 3 Hypothesis development.- 3.1 Section outline.- 3.2 Development of value levers.- 3.3 Lever 1: Focus and investment efficiency.- 3.4 Lever 2: Information asymmetries and disclosure.- 3.5 Lever 3: Incentive compensation.- 3.6 Lever 4: Ownership concentration.- 3.7 Summary of hypotheses.- 4 Empirical Evidence.- 4.1 Section Outline.- 4.2 Data.- 4.3 Methodology.- 4.4 Results.- 4.5 Discussion.- 5 Conclusion.- 6 References.

Über Autor(innen)

Dr. Lukas Junker promovierte bei Prof. Dr. Malte Brettel am Lehrstuhl für Wirtschaftswissenschaften für Ingenieure und Naturwissenschaftler der Rheinisch-Westfälischen Technischen Hochschule Aachen. Er ist als Unternehmensberater im Sektor Financial Institutions bei McKinsey & Company in Frankfurt am Main tätig.