Firm Value Effects of Global, Regional, and Local Brand Divestments in Core and Non-Core Businesses
Author
Depecik, B.
van Everdingen, Y. M.
van Bruggen, G. H.
Date
2014Source Title
Global Strategy Journal
Print ISSN
2042-5791
Publisher
Wiley
Volume
4
Issue
2
Pages
143 - 160
Language
English
Type
ArticleItem Usage Stats
130
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208
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downloads
Abstract
In this article, we investigate the effect of brand divestments on firm value. We integrate two common motives for focus-increasing brand divestitures—global branding and refocusing on core businesses—in a single common framework. In particular, we investigate the effects of divesting local/regional/global brands in core businesses and local/regional/global brands in non-core businesses on firm value. Analyzing 205 divestment announcements in the global food and beverages industry, we find that, in most cases, brand divestments destroy firm value. Only when firms divest local or regional brands in non-core businesses is the effect on firm value positive.
Keywords
Brand divestmentsBrand portfolio management
Portfolio refocusing
Event study
Food and beverages industry