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How Preussag Became TUI: A Clinical Study of Institutional Blockholders and Restructuring in Europe

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  • Ingolf Dittmann
  • Ernst Maug
  • Christoph Schneider

Abstract

"Between 1997 and 2004, Preussag, a diversified German conglomerate of "old economy" businesses, transformed itself into TUI, a company focused almost entirely on tourism and logistics. We analyze how Preussag executed this change, and how the change contributed to Preussag's underperformance in the stock market. We find that only the divestitures created value, that the strategy to invest in tourism destroyed value, and that the acquisition premiums Preussag paid were mostly unjustified. The case shows how divestiture programs increase the liquid resources available to management and casts doubt on the positive governance role of institutional blockholders." Copyright (c) 2008 Financial Management Association International..

Suggested Citation

  • Ingolf Dittmann & Ernst Maug & Christoph Schneider, 2008. "How Preussag Became TUI: A Clinical Study of Institutional Blockholders and Restructuring in Europe," Financial Management, Financial Management Association International, vol. 37(3), pages 571-598, September.
  • Handle: RePEc:bla:finmgt:v:37:y:2008:i:3:p:571-598
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    Cited by:

    1. repec:spr:scient:v:102:y:2015:i:3:d:10.1007_s11192-014-1495-0 is not listed on IDEAS
    2. Schönhaar, Sebastian, 2013. "Uncovering business portfolio transformation processes: Development of a metric to measure and quantify business portfolio transformations," Freiberg Working Papers 2013/01, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.
    3. François-Xavier Delaloye & Michel Habib & Alexandre Ziegler, 2012. "Swiss banking secrecy: the stock market evidence," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 26(1), pages 143-176, March.

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