DR. Johanna van sevenant

Divestment Spin-Offs as Strategic Game-Changer :  

The Case of Aperam and ArcelorMittal (2010-2018)


Divestment Spin-offs as Strategic Game-Changer: The Case of Aperam and ArcelorMittal (2010-2018)

Written by Dr. Johanna Van Sevenant

This research paper aims to explore the rationale behind the decision to spin-off a division from a large steel company from the rest of the Group. Second, the research will assess if the initial objectives behind this corporate spin-off have been achieved. The research will then shed light on the key success factors leading the divested unit to increase performance against competition after its separation from the parent Group.  

Building on the in-depth study of the spun-off entity genesis, reorganization, and strategic development, the case study shows clear evidence that the spin-off has been the catalyst for improved performance against the competition. However, the initial objectives behind the separation deal have only been partially achieved.  The case also highlights the rich nuances of how the divestment has affected the singular trajectory of the spin-off entity within its Industry, providing context to create unique strategic opportunities combining internal organization considerations and external competitive and cooperative interactions. 

This study provides a depth of understanding of corporate spin-off key internal and external success factors that previous research did not capture. The case also confirms emergent literature heading towards a new and more strategic approach from theory and practice on corporate divestment in general and corporate spin-offs in particular. Finally, the case study is a unique example of how a spin-off can be a catalyst for changing the business game in an Industry and a catalyst for re-shaping business strategies, revealing the usefulness of game theory principles and methods notably for corporate divestment decisions. This holistic approach paves the way for future empirical studies, new theoretical approaches and helps organizations better manage separation decisions strategically towards increased performance and value creation

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