The Study On The Motivation And Economic Consequences Of Asset Divestiture

In the process of enterprise development,it often faces the problem of diversification or specialization.Companies that choose diversified operations are usually to increase profits and expand their strategic territory.However,in the process of diversification,there are often problems of excessive diversification,such as negative synergies between the two businesses.At this time,enterprises will choose to do subtraction,that is,to use asset stripping as a restructuring method,in order to achieve the effect of "2-1>1".This has also caused the number of divestitures to skyrocket.However,the research on asset divestiture in my country is still inconclusive and most of the researches focus on divestiture motivation and divestiture performance,and rarely involve the actual operation of asset divestiture in the process of divestiture.For example,what underlying divestment to choose?When is it peeled off?Which peeling method to choose?Therefore,we still need to conduct more in-depth research on asset divestiture,hoping to be a reference for those companies that need asset divestiture.Through the case study method,this paper takes the asset divestiture implemented by Hongdou in late 2016 as the research object,and explores the reasons for divestiture,the selection of divestiture targets,the selection of divestiture timing,the selection of divestiture methods and the economic consequences.It is hoped that by analyzing the above problems,on the one hand,the current theoretical research can be further enriched,and on the other hand,it can also provide reference for other enterprises to implement asset divestiture.Through the research,the following conclusions are drawn:(1)Implementing asset divestiture can optimize resource allocation and adjust corporate strategy;(2)Asset divestiture strategy affects the final divestiture effect of an enterprise;(3)Asset divestiture may not necessarily improve the market performance of an enterprise;(4)divestments can improve the financial performance of a company.