Research On Corporate Divestiture

Corporate divestiture, as M&A, is one of the important ways of corporate restructuring. But compared with M&A, Corporate divestiture has never been given the deserved attention by the theoretical and practical for a long time. Why does corporate divestiture happen frequently? What influence will corporate divestiture give to the enterprises on business? What will the stock price react to the declaration of corporate divestiture? These questions are worthy of deeply study. Through collecting data and information in the securities market, the thesis attempt analyzing the phenomenon of corporate divestiture, and issuing some simple proposal.This thesis begins with the introduction, introducing the research motive, significance, structure, methodology, innovation, and so on. Then mainly introduces the theory related to corporate divestiture, as the starting point of this theoretical study, briefly analysis the reasons and the present conditions of corporate divestiture. Next is an empirical research of corporate divestiture, divided into two parts. From a corporate perspective, using the Accounting Study approach, analysis the reaction of stock price and operating performance of corporate divestiture; from a shareholders perspective, Using the Event Study approach,analysis the reaction of stock price before and after the declaration of corporate divestiture, researching whether shareholders will gain outstanding abnormal returns between the declaration of corporate divestiture. Then is the limitations of this study. Finally I raised some policy and proposals which will enhance the value of the company, respectively with government regulatory bodies and companies. Then is the conclusions of this thesis.