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Firm Value Effects of Global, Regional, and Local Brand Divestments in Core and Non‐Core Businesses
Author(s) -
Depecik Baris,
Everdingen Yvonne M.,
Bruggen Gerrit H.
Publication year - 2014
Publication title -
global strategy journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.814
H-Index - 24
eISSN - 2042-5805
pISSN - 2042-5791
DOI - 10.1111/j.2042-5805.2014.1074.x
Subject(s) - divestment , business , core (optical fiber) , value (mathematics) , industrial organization , marketing , telecommunications , finance , machine learning , computer science
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.