IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-00458714.html
   My bibliography  Save this paper

Understanding value generation in buyouts

Author

Listed:
  • Oliver Gottschalg

    (GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique)

  • Achim Berg

Abstract

Buyouts have been described as a specific form of financial acquisition that leads to potentially substantial, but also highly volatile returns to equity investors. Previous research has illustrated a number of mechanisms through which buyouts cause increases or decreases in company value. Besides the traditional mechanisms like improved governance or incentive systems, more innovative and entrepreneurial levers like increasing strategic distinctiveness and mentoring are examined. While it is important to understand the performance impact of each of these levers individually, we are still missing a comprehensive framework that captures the full complexity of the buyout value generation process and recognizes interdependences between various factors. In this paper, we develop a three-dimensional conceptual framework for value generation in buyouts that categorizes and links the different levers of buyouts value generation. This framework provides the basis to take a look beyond individual value levers and sheds light on the underlying strategic logic of buyouts. We then review the literature on buyouts and categorize previously identified levers of value generation according to our framework. At the same time, we identify a number of levers that have received little attention in the academic literature so far or still lack convincing empirical support for their performance impact. Building upon this assessment of the status quo in research in buyout value generation, we outline an agenda for future research.

Suggested Citation

  • Oliver Gottschalg & Achim Berg, 2005. "Understanding value generation in buyouts," Post-Print hal-00458714, HAL.
  • Handle: RePEc:hal:journl:hal-00458714
    DOI: 10.1142/S0219869X05000221
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Francesco Castellaneta & Oliver Gottschalg, 2016. "Does ownership matter in private equity? The sources of variance in buyouts' performance," Strategic Management Journal, Wiley Blackwell, vol. 37(2), pages 330-348, February.
    2. Olivier, Gottschalg & Meier, Degenhard, 2006. "What does it take to be good parent ? Opening the black-box of value creation in the unrealated multibusiness firm," HEC Research Papers Series 822, HEC Paris.
    3. Francesco Castellaneta & Maurizio Zollo, 2015. "The Dimensions of Experiential Learning in the Management of Activity Load," Organization Science, INFORMS, vol. 26(1), pages 140-157, February.
    4. Gottschalg, Oliver & Meier, Degenhard, 2005. "Interest alignment and firm performance," HEC Research Papers Series 825, HEC Paris.
    5. F. Castellaneta & O. Gottschalg & M. Wright, 2012. "The Fruits Of Iterative Learning And Negative Performance Feedbacks: Evidence From Private Equity Backed Buyouts," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 12/770, Ghent University, Faculty of Economics and Business Administration.
    6. Choi, Young Rok & Yoshikawa, Toru & Zahra, Shaker A. & Han, Bong H., 2014. "Market-oriented institutional change and R&D investments: Do business groups enhance advantage?," Journal of World Business, Elsevier, vol. 49(4), pages 466-475.
    7. Laure-Anne Parpaleix & Kevin Levillain & Blanche Segrestin, 2018. "Financing innovation: two models of private equity investment," Post-Print hal-01768986, HAL.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-00458714. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.