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Divestiture and Its Market Reaction in a Consolidating Industry: The Global Brewing Industry

Published online by Cambridge University Press:  08 March 2021

Ludwig Erl  and
Florian Kiesel Open the ORCID record for Florian Kiesel [Opens in a new window]
Ludwig Erl
Affiliation:
Department of Business Administration, Economics and Law, Technische Universität Darmstadt, 64289Darmstadt, Germany; e-mail: ludwig.erl@bain.com.
Florian Kiesel*
Affiliation:
Grenoble Ecole de Management, 38000Grenoble, France
*
e-mail: florian.kiesel@grenoble-em.com (corresponding author).
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Abstract

This study provides a perspective on the market performance of divestitures in the global brewing industry. In 2018, the five largest players accounted for 60% of the global beer volume. We analyze to what extent the capital market values divestitures in an industry where players usually seek efficiency gains and growth through mergers and acquisitions. Based on a sample of 61 divestiture intent announcements in the period from 1999–2018, this study shows that publicly listed brewing groups experience significant positive abnormal returns of about 1.4%. We measure the influential effect of success determinants concerning the underlying industry, the divested business, the divestiture structure, and the divestor itself. (JEL Classifications: G14, G34, L25, Q14)

Keywords

brewing industrydivestitureevent studyindustry consolidation
Type
Articles
Information
Journal of Wine Economics , Volume 16 , Issue 3 , August 2021 , pp. 239 - 259
Copyright
Copyright © The Author(s), 2021. Published by Cambridge University Press on behalf of American Association of Wine Economists

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Footnotes

We thank an anonymous reviewer and Karl Storchmann (the Editor) for their useful comments that greatly improved the quality of this article. This article is a shortened version of a study undertaken as part of the PhD dissertation of Ludwig Erl. This research did not receive any financial support.

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