The Research On Method Choosing In Enterprise's Divestiture

The theory research on divestiture has persisted for more than ten years. And becomes mature nowadays, which is successfully applied in more and more enterprises to perfect the asset structure and optimize the asset qualities. Divestiture has strong pertinence for the solution against the enterprises' inefficient operation. The enterprises could use the Divestiture to achieve the return of the main operation; the improvement of the fluidness; the reduction of the operation risks; the increase of enterprises' profits, etc.Recent years, the divestiture theory gets more and more recognition. While most of the practice is single Sell-off, excepting for which, asset divestiture method should include Spin-off; Asset Exchange and Equity Carve-out, etc.Based on above divestiture methods, the author summarizes their own characteristics and application areas systematically and raises the quantitative analysis model for the divestiture method choosing, then use the demonstration to make the model modified and perfect. The model has important value and significance to offer a guide for the enterprises to choose the available methods.Generally, the main parts of the paper are as below:Firstly, the author analyses various kinds of divestiture methods widely applied in the enterprises nowadays, and sum up 4 representative methods: Sell-off; Asset Exchange; Spin-off; Equity Carve-out and then make compositor one by one according to their different characteristics and the relations with parent company after divestiture.Secondly, the author analyses the characteristics of the assets which will be divested, including the strategy; market; finance condition and the risk, etc. And get the relative value of the asset with the scale 0～1, and based on which, we could confirm the appropriate divestiture methods. The more numerical value, the more values, so the assets should be reserved and create profits for the parent company and the enterprises should choose the divestiture method after which the assets also have close relationship with the parent company. By contraries, the enterprises should choose the divestiture method after which the assets have no relationship with the parent company any more.At last, the author analyses one company and its assets that will be divested and chooses the method based on above conclusion, and then find the deficiency and unreasonableness. Where after modify the quantitative analysis model.