• Alumni  
  • FacebookTwitterLinkedInXingGoogle+RSS
  • Country websites
 
 
 

Carve-outs

2012

In the course of carve-outs, an array of organizational, contractual and company law issues must be dealt with to prepare the carved-out unit for independence. Only when these issues have been completely disentangled the newly crafted unit can be removed from the parent as a separate entity. The next step is to determine the way the carved- out unit is transferred: Is the entity to be floated on the stock exchange or a spin-off? Is it to be sold to a financial investor or a strategic buyer?

All carve-out programs – without exception – lead to both one-time and recurring transaction costs. They also keep the wider organization well occupied with the process of separation for a period of time. Such "distractions" can keep many employees from doing what they are supposed to be doing, such as focusing on product or market developments.Carve-outs are by no means rare in practice, and there are plenty of examples in which management has successfully accomplished this gargantuan task. On the other hand, the parties to such transactions often make the same avoidable seven mistakes again and again.

Experts

More publications