The Study On Equity Carve-outs Based On Corporation Contracting Strategy

Capital expansion and contraction is the operation of two ways, there is no comparison of advantages and disadvantages in essence. But in our business expansion through a relative, from the strategic development of the enterprise perspective, it is the blind expansion that will inevitably bring to the continuing decline in business performance. Based on this, the wave of mergers and acquisitions to bring the diversity of management caused by low and difficult to achieve synergistic effects have prompted people to reflect on them. The development of shrinkage in our capital operation began in the 20th century, 90 years, it is mainly theoretical research on three means of the contraction effect of the motives and values of divestitures, spin-off, share repurchases. It is the company of Tong Ren Tang successful spin-off in 2000 that is a contraction of capital operation in China's first successful act.GEM successfully established in 2009, the Commission allow listed companies spin-off subsidiary to separate listing on GEM in 2010 which created a favorable economic development environment in China, the market investors and managers gradually began to concerned about that.Based on the above background, first of all, this article describes shrinkage in capital operation and development, it described the relationship between the contraction strategic and the contraction of capital operation, and that the contraction strategic materialize the contraction of capital operation;Secondly, my article depict the history of the domestic and the external,the motivation theory, the creating wealth theory of the spin-off; and then,after determining the basic framework of the thesis, this paper from the effects of short-term and long-term value to empirical research spin-off,respectively, the effect of short-term value make use of the traditional event study method,the effect of long-term value is used in the data envelopment analysis (DEA), by calculating the two indicators: the stability indicator ofθ* and the Malmquist index indicators to confirm each other. From the fore-and-aft ten days of the spin-off on cumulative abnormal return (CAR) charts, as well as the fore-and-aft splitting of the stability indexθ* and the Malmquist mean index curves can elicit that companies can obtain short-term and long-term value of the effect; Finally, to table a proposal the limitations and rationalization proposals on the question of the theory analysis and empirical research. This paper have selected a listing of the spin-off effects of short and long term value which is of the representative on contraction of capital operation, and it is the purpose that strive to address the following two questions: (1) if the contraction of the capital which began in the West can create value for our country enterprise; (2) to make reasonable suggestions and inspiration for the use of corporate capital operation shrinkage.