Corporation Spin-off Strategy Research --- Eaton Corporation Semiconductor Equipment Operation
Jen Chieh, Yang
Sue Fung, Wang
The purpose of this thesis is to identify the strategy of corporation spin off. There are a lot of articles and books to discuss the issues about mergers and acquisitions to help corporation to develop and grow rapidly. Based on the past experiences, fewer cases succeed in mergers and acquisitions. Some reasons come from the improper resources allocation. It does not balance the resources and corporation growth strategy. Eventually, there are not any companies that have boundless resources to expand its business size. To some extent, it has to make some reasonable and effective resource planning. This research makes efforts to deliberate Eaton’s case - the process, impact and result to the corporation, employees and shareholders. How the corporation to take and give is to congregate its core competence business units to face its challenge in the future. This study uses Eaton Corporation semiconductor equipment operation as the case of this thesis and to identify the corporation strategy – Spin Off. It is not only that its success of spinning off its semiconductor equipment operation but also it prove itself good performance of multiplying its business while it rewards its shareholders with over 18% high returns on equity for the last decade. This thesis mainly comprises two concepts: I, The Impact of Merger and Acquisition Vs Divestiture and Spin-off to corporation growth. II. The Role of Spin-off Strategy to Corporation Development and focus. In chapter 1, introduce the Eaton Corporation’s overall business activities, what its mission and value. Chapter 2 discusses some related articles and researches of mergers, acquisitions, and divestiture. These strategies strengthen corporation core business and let the corporation become more competitive. Chapter 3 and Chapter 4 explain Eaton Corporation long-term development strategies, how it pursued its interest through various strategies, the process of spin-off and the result analysis, the influences to the corporation finance, operation, employees and shareholders. Chapter 5 explains what spin-off and why to spin off. In the conclusion, this research emphasizes the importance of spin-off and focus and explains how the enterprise should always review its business units to reorganize its core competence business unit by divestiture and acquisition. It is also important to get businesses focus through spin-off.