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

Types of mutual funds, Types of Mutual Funds The objectives of a Mutual...

Types of Mutual Funds The objectives of a Mutual Fund are as follows: To provide an opportunity for lower income groups to acquire property without much difficulty in the

Expected return of your portfolio, You own three stocks: 1000 shares of App...

You own three stocks: 1000 shares of Apple Computer, 10,000 shares of Cisco Systems, and 5000 shares of Goldman Sachs Group. The current share prices and expected returns of Apple,

Equity theory, Equity Theor y This theory proposes that indivi...

Equity Theor y This theory proposes that individuals measure their out- comes/input ratio. Equity theory distinguish that inspiration is not the outcome of an absolute

Rationale of accounting standards, Rationale of Accounting Standards A...

Rationale of Accounting Standards Accounting Standards are created along with a view to harmonise various accounting policies and practices in use inside a country. The goal o

Financial mangement enviroment, 1. role financial intermediaries 2. nature ...

1. role financial intermediaries 2. nature and role of money markets

Determine the concept of measuring the rate of return, Determine the concep...

Determine the concept of Measuring the Rate of Return The rate of return is total return the investor receives during holding period (the period when security is owned or held

Time series analysis, In Time Series Analysis, we try to identify and deter...

In Time Series Analysis, we try to identify and determine the pattern of changes in the data collected over regular intervals of time. The data collected can be at a periodical int

Illustrate miller-orr model recognises, Q. Illustrate Miller-Orr model reco...

Q. Illustrate Miller-Orr model recognises? The Miller-Orr model recognises which cash balance requirements are likely to fluctuate and that active management is required in r

Determine the key factor affecting financing costs, Determine The key facto...

Determine The key factor affecting financing Costs Because cost of capital is measured under the assumption that both firm's asset structure and its capital (financial) structu

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