| As society and the economy continue to grow,the challenges faced by companies are becoming more and more daunting and management needs to make more decisive and sober decisions to ensure that the company survives the fierce competition and is not overwhelmed by the flood of the times.However,some companies have not only failed to achieve their original ambitions by over-diversifying and expanding blindly,but have also lost their core competencies by fragmenting their core businesses,limiting their development and greatly reducing their operational efficiency.As a result,many listed companies have chosen to divest their assets in order to alleviate their financial crisis and reorganise their strategies.However,the motivation and actual situation of divestiture are diverse,and different companies have different motivations and consequences for divesting their assets.As a leading company in the snack food industry,the divestment of Bacchus,which contributed 80% of its revenue,is a unique case in itself.Therefore,the study of the motivation and economic consequences of the divestiture of this company is of some scientific value.This paper takes the transfer of Pepsi Co to Pepsi Co Beverages in FY2020 as the subject of this study.The background of the case is firstly introduced,including the detailed process of the implementation of the divestiture and the elaboration of the characteristics of the divestiture,and then the motives are analysed,specifically divided into intrinsic and extrinsic motives,among which the intrinsic motives are divided into the following four points:(1)high integration risks and failure to achieve economies of scale;(2)large internal cultural differences and divergent business philosophies;(3)increasing cash flow and reducing the equity pledge ratio;(4)adjusting strategy and return to the main business.The external drivers are divided into the following three points:(1)intense competition in the industry and the risk of goodwill impairment;(2)the disappearance of the online dividend and Bacchus reaching the performance ceiling;and(3)the "fourth meal" of casual snacks and the huge potential of the high-end market.In the economic consequence analysis section,the market reaction was analysed using the market research method to comprehensively evaluate the market performance.The study found that the market was positive towards the divestment and shareholders received positive excess returns as the company’s share price increased.The change in the company’s performance was then reflected by the change in financial indicators for the five years before and after the divestment,comparing Goodwill’s financial data with industry averages and interpreting the impact of the divestment on the company’s financial performance.The results show that divestitures have a significant effect on a company’s short-term performance,but that long-term performance depends on the subsequent development of the company.In terms of non-financial consequences,we first collated the changes in the shareholding structure and management of Goodwill,and found that the increase in control by the majority shareholder after the divestiture was more conducive to centralised management and alignment with relevant business strategies.We also analysed the main uses of the funds obtained from the divestiture in terms of research and development and investment and financial management,and found that Goodwill has not yet found a suitable investment channel for you at present.Finally,based on the above analysis,relevant insights on divestiture of listed enterprises are as follows:(1)assess the risk of divestiture before divestiture to avoid homogeneous competition;(2)make good information disclosure when divesting to enhance investor confidence;(3)re-integrate resources after divestiture to seek sustainable development. |
