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Apart from mergers and acquisitions, explain shrinkage strategies as alternative ownership strategies

      

Apart from mergers and acquisitions, explain shrinkage strategies as alternative ownership strategies

  

Answers


Francis
Shrinkage Strategies
1. Divestures – Sale of a segment of a company (assets, a product line, a subsidiary) to a third party for cash and/or securities.

2. Equity Carve outs – A transaction in which a parent firm offers some of a subsidiary’s ordinary shares to the general public to bring in a cash infusion without loss of control.

3. Spin-offs – A transaction in which a company distributes on a pro rata basis all of the shares it owns in a subsidiary to its own shareholders; creates a new public company with (initially) the same proportional equity ownership as the parent company.

4. Tracking Stock – A separate class of ordinary shares of a company that tracks the
performance of a particular segment or division.
francis1897 answered the question on February 27, 2023 at 06:33


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