Explain the divestment of company re-organisations, Financial Management

Assignment Help:

Divestment of company re-organisations

Adisinvestment or divestment is selling part of the business or subsidiary to another third party.

Reasons and features for divestments include:

· Liquidate assetsfor instance Littlewoods liquidation of 'Index 'catalogue stores in 2005 because of failure to compete effectively with Argos. Also liquidation of Woolworths in 2008. All assets sold, liabilities settled and company wound up. .

· Sell off products or brands as a going concernfor illustration there was speculation by media in 2004 that Nestle would sell its 'Perrier 'brand.

· Managementbuyout (MBO) for example when an existing internal management team buy a large part or all of the shares in the company. New Look was subject of a management buyout in 2004 by Tom Singh, the founder of the company who had floated it in 1998.

  • Management buy in (MBI)for example management team from outside the company raises the necessary finance and buys a large part or all of the shares in the company.

·  Demerger (sale off or unbundling)of divisions (business units) in a group for example Marriott Hotels was disposed of and demerged by Whitbread Group in 2005.Retailing giant Kingfisher,  which  owns  DIY  group  B&Q  demerged  Kesa  Electricals  in  2003  to concentrate  on  its  core  DIY  business, it created two  independent  businesses  with strong brands, they also demerged Woolworths in 2001.

· Rationalisationfor example cost  cutting  and  streamlining  business  activities  to  save  cost and improve efficiency, B&Q closure of 10 unprofitable stores in 2005.

 


Related Discussions:- Explain the divestment of company re-organisations

Mba 7200, nd held it until it matured, what annual rate of return would she...

nd held it until it matured, what annual rate of return would she have earned? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16

In how many area ratios are grouped, In how many area ratios are grouped ...

In how many area ratios are grouped Ratios can be grouped into 3 main areas: 1 Performance - how well business has done (profitability) 2 Position - short term standing

Define required cash and surplus cash, 1. What is a venture's present value...

1. What is a venture's present value? Does the past matter? What is meant by the statement, "If you are not using estimates, you are not doing a valuation?" 2. Define (a) requ

Operating cycle and financial management, discuss the applicability of oper...

discuss the applicability of operating cycle and any other financial management in poultry business in uganda

Equity instruments, QUASI-INSTRUMENTS These instruments are considered ...

QUASI-INSTRUMENTS These instruments are considered as debt instruments for a time-frame and are converted into equity at the option of the investor (or at company's option) aft

Assessment of in individual strengths and weaknesses, Assessment of in indi...

Assessment of in individual strengths and weaknesses Before finalizing career plan for an individual and placing him on career path, it is necessary to access his strengths and

Exchange rate uncertainty affect firm exchange risk exposure, The exchange ...

The exchange rate uncertainty may not essentially mean that firms face exchange risk exposure. Describe why this may be the case. Answer:  A firm can comprise a natural hedging p

Budget classification on the basis of time, ON THE BASIS OF TIME • Lon...

ON THE BASIS OF TIME • Long term budget :  as per the National Association of Accountants, America, a long term budget is a systematic and formalized process for purposeful co

Leverage, What are the importance of leverage on a small scale firm?

What are the importance of leverage on a small scale firm?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd