Nordic Corporate Spin-offs : An empirical study of long-term shareholder value creation through corporate spin-offs in the Nordic countries.

Abstract

This thesis investigates the long-term shareholder value creation associated with Nordic corporate spin-offs completed between 1996 and 2022. The Nordic region is fascinating, as it is an under-researched area on this topic. Our sample consists of 77 Nordic spin-off pairs. We examine abnormal returns up to 9 years post-spin-off. Additionally, we look at possible factors that could explain the value creation. We find that subsidiaries have significant positive long-term abnormal returns after approximately 3 to 5 years post-spin-off. In contrast, parent companies exhibit no clear pattern of value creation or destruction in the long term. The combined proforma portfolios (a value-weighted portfolio of the subsidiary and the parent) indicate potential value creation. However, the evidence could be more uniformly robust. Regarding different factors that explain value creation, we find that subsidiaries listed in the same industry as their parent companies yield significant long-term abnormal returns and perform better than subsidiaries listed in a different industry. Additionally, we find that relatively large subsidiaries, compared to their parents, tend to perform better than smaller ones.