Corporate Spin-offs : An empirical study of shareholder value creation through corporate spin-offs on the Nordic stock exchanges
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- Master Thesis 
In this thesis we examine short- and long-term shareholder value creation associated with Nordic corporate spin-offs from January 1, 1998 to July 31, 2021. We perform an event study on a sample of 119 spin-off announcements. The main objective is to determine if spin-off announcements have a significant positive impact on the market valuation of the firms. Furthermore, we create calendar-time portfolios returns regressed against the Fama-French three factor model to control for long-term value creation. The long-term sample consists of 52 parent- and spin-off firms for a period of 6-, 12-, 18- and 24-months. In addition, we test for the following value creating factors information asymmetry, corporate focus and relative size of the spin-off both at the announcement date and long-term. Our results show that Nordic spin-offs generate a cumulative average abnormal return of 2.27% from the day prior to the day after the announcement. The result is statistically significant at the 1% level. This is in-line with previous European and US studies on spin-offs. We do not find statistically significant results at the 1% level with respect to information asymmetry, corporate focus and relative size at announcement. We find no evidence on shareholder value creation from corporate spin-off over a 24-month period. The abnormal returns are not statistically significant for any periods. The previous European study also show no evidence of long-term abnormal returns from spin-offs. Furthermore, the three value creating factors information asymmetry, corporate focus and relative size do not yield statistically significant abnormal return at the 1% level for any of the periods.