, Columnist
Private Equity Winces as Companies Do the Splits
Buyout firms may struggle to land assets from Akzo and SCA.
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Spin or sell? It's usually a phantom choice for companies looking to jettison assets as they break themselves up. They almost always plump for the sale. But high stock-market valuations are making spin-offs more feasible. That's helpful to Swedish tissue-maker Svenska Cellulosa AB and Dutch chemicals group Akzo Nobel NV as they grapple with changes to their structure.
Disposing of unwanted assets to industrial rivals or private equity firms gives the vendor a clean break and raises capital for reinvestment. A parallel process to give the asset a stock-market listing, via an initial public offering or demerger, is usually pursued half-heartedly only to keep bidders honest.