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Spin to win? Shareholder wealth effects of corporate spin-offs in Europe
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Bachelor's thesis
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en
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30+5
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This thesis studies the announcement-period wealth effects of 206 corporate spin-offs announced between 2000 and 2025 in European equity markets. Particular emphasis is placed on examining which firm- or transaction-specific characteristics help explain announcement returns. The results show a statistically significant average three-day cumulative abnormal return of 3.77% around the announcement date. The results suggest that spin-offs that increase the parent firm’s focus on its core business and spin-offs involving relatively larger divested units generate larger positive abnormal returns around the announcement date. In contrast, I find no evidence that geographical focus, wealth transfer from bondholders to shareholders or investor sentiment are related to spin-off wealth effects.