infonet-economy

In this paper, we analyze the question of whether companies that sell assets
to private equity funds experience higher abnormal returns than companies
that sell assets to buyers with strategic interests. Moreover, we investigate
whether companies that sell assets to private equity investors have different
changes in systematic risks than companies that sell to strategic buyers. Using
data for asset sales in Germany, Switzerland and Austria and employing event
study methodology, we find that the announcement of asset sales generally
generates positive abnormal returns with the transactions where there is a
private equity buyer having significantly higher abnormal returns compared to
transactions where there is a strategic buyer. On the other hand, we find no
evidence of changes in systematic risk, neither for the sample consisting of all
transactions nor for the sub-samples of sales to private equity funds and strategic
buyers, respectively.