The Key Factors of Divest Segments for Publicly Listed Companies in Taiwan

• Main Authors: Yu-Hwa Hsieh, 謝玉華
• Other Authors: Dr. Jia-Xun Jiang
• Format: Others
• Language: zh-TW
• Published: 2009
• Online Access: http://ndltd.ncl.edu.tw/handle/78250933027728534680

碩士 === 輔仁大學 === 會計學系碩士班 === 98 === This study investigates the factors affecting the spin-off of enterprises with spun-off listed companies during 2002 - 2008 as samples. Theoretically, either the spin-off or asset sale is a divestiture. This study first delineates the main differences among Sell-offs, Spin-offs and Equity carve-outs with examples from the samples. In Taiwan, the Spin-off is the most common practice and there are only 4 cases involving Equity carve-outs in the samples; hence, they are investigated in the case study in the appendix. In this study, the t-test was applied to examine the companies adopting Spin-off with matching approach in terms of operational centralization, capital demand, corporate governance mechanism and operational performance. Research results show that operational centralization and operational performance are the major factors affecting the choice of Spin-off. Enterprises adopt Spin-offs to enhance operational centralization and improve operational performance. Also, the operational performance of Spin-offs in heterogeneous industries improves more than in homogenous industries. Apart from statistical analysis, the case study was applied. Results of the case study show that 20.0% of the samples have separation production and sales in the Spin-off. This suggests that the Spin-off provides a solution for enterprises to maintain a balance between branding and manufacture. Second, after a subsidiary has spun off from the parent company and became a listed company itself, the transparency of information of the parent company also enhanced. When this subsidiary is listed for OTC trade, this will positively increase the capital or revenue of the parent company holding its shares. Additionally, the results of the case study investigation of Equity carve-out in the appendix show that the company usually selects departments that have lower operational centralization and long-term deficits as targets of equity carve-outs. After carving out unnecessary departments, a company will adopt the Spin-off to promote organizational restructuring to focus on operations.