In this article, we investigate the effect of brand divestments on firm value. We integrate two common motives for focus-increasing brand divestitures—global branding and refocusing on core businesses—in a single common framework. In particular, we investigate the effects of divesting local/regional/global brands in core businesses and local/regional/global brands in non-core businesses on firm value. Analyzing 205 divestment announcements in the global food and beverages industry, we find that, in most cases, brand divestments destroy firm value. Only when firms divest local or regional brands in non-core businesses is the effect on firm value positive.

Additional Metadata
Keywords brand divestments, brand portfolio management, portfolio refocusing, event study, food and beverages industry
Persistent URL dx.doi.org/10.1111/j.2042-5805.2014.1074.x, hdl.handle.net/1765/51559
Series ERIM Top-Core Articles
Journal Global Strategy Journal
Depecik, B.E, van Everdingen, Y.M, & van Bruggen, G.H. (2014). Firm Value Effects of Global, Regional, and Local Brand Divestments in Core and Non-Core Businesses. Global Strategy Journal, 4(2 (July-December 2013)), 143–160. doi:10.1111/j.2042-5805.2014.1074.x