Using Divestitures as a
Lever for Change

By Arthur Bert and Caroline Firstbrook, Accenture
 
The sale of a business whose work force differs substantially in composition ,practices or culture can also eliminate damaging internal friction and createa buoyant sense of optimism among the employees who remain. The use of culture assessment tools can help to highlight these differences, and can be used to set and measure progress towards cultural and behavioral goalsfor the remaining business. Optimizing Back-Office Functions It is common in a divestiture for theparent company to continue to support some of the divested unit's back-office functions for a period of time after the sale.
 
As this support is ramped down, there is often an opportunity fora fundamental redesign of how back-office functions are performed. This might include relocating activities to take advantage of labor cost differences,or outsourcing functions entirely
 
 

     

Takeovers and Leveraged Buyout
by Gregg A Jarrell, professor of economics and finance at the University of Rochester's Simon School of Management

Corporate takeovers became a prominent feature of the American business landscape during the seventies and eighties. A hostile takeover usually involves a public tender offer—a public offer of a specific price, usually at a substantial premium

 
over the prevailing market price, good for aspecific price, usually at a substantial premium over the prevailing market price, good for a limited period, for a substantial percentage of the target firm's stock...

U.S. Leveraged Buyout Market From 1980-2002

The leveraged buyout market rose to prominence in the late 1980s when private equity firms such as Kohlberg Kravis & Roberts ("KKR") and Fortsmann Little were consistently making headlines with large buyouts including the largest leveraged buyout ever, KKR's $25 billion buyout of RJR Nabisco in 1988. The success of these financial sponsors (i.e., private equity firms) and others in completing transactions and earning favorable returns attracted many other parties to the industry. There are currently hundreds of financial sponsors focused on buying companies of all sizes across many industries.

With an estimated $120 billion in uninvested capital, hundreds of financial sponsors, and a difficult M&A environment, private equity firms currently face a challenging environment.
 
 
 
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Selected Articles
Management Remains Key to Buyout Success, Study Reveal
Using Divestitures as a Lever for Change
Reverse Takeovers: A shell game
The 1980s Takeover Boom and Government Regulation
Debt, Leveraged Buyouts, and Corporate Governance
U.S. Leveraged Buyout Market From 1980-2002
  Takeovers and Leverage
d Buyout
  Merging Successfully- The importance of understanding Organisational Culture in M&A
  Making Mergers a Growth Strategy
Using Divestitures as a
Lever for ChangeUniversity
Teaching US Mergers and Acquistions Law at Remin University

 


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