The Value From Acquiring and Divesting A Joint Venture : A Real Options Approach  

Oleh:

Kumar, M. V. Shyam

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: Strategic Management Journal vol. 26 no. 4 (Apr. 2005), page 321-332.
Topik: joint venture; joint ventures; real option; termination; event study; acquisitions; divestitures

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: SS30.18 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

This study examines the value created form acquiring and divesting a joint venture. Unlike previous research which focuses on parent firm factors, the study examines value in light of the reason behind the termiantion of the venture and the characteristics of the target market. Consistent with the real options view, the paper finds that ventures divested to refocus a parent firm's product market potfolio were associated with significant value creation. In contrast, ventures acquired with the objective of growth and expansion in a target market, while not associated with significant value creation, did not destroy value either. Apart from these results, the paper also finds that acquirers and divesters gained lesser value when they terminated ventures in uncertain an concentrated industries. These latter findings highlight an important caveat with regard to termination : joint ventures confer valuable flexibility which is also forgone once they are terminated. Implications are discussed.

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