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Definition of

asset stripping

Mergers & Acquisitions

practice of selling acquired firm's assets piecemeal the purchase of a company whose market value is below its asset value, usually so that the buyer can sell the assets for immediate gain. The buyer usually has little or no concern for the purchased company's employees or other stakeholders, so the practice is generally frowned upon.

Related definitions of "asset stripping"

Recommended Further Reading (Term count)
  • Issuing Corporate Debt
    by Steven Lowe
    The existence and determination of optimal capital structure is an ongoing topic of research in corporate finance. In a perfect market setting, with no frictions, Modigliani and Miller’s seminal research in 1958 suggested that the market value of a firm is independent of its capital structure. In other words, capital structure does not matter.Miller (1991) explained the intuition for this with a simple analogy: “Think of the firm as a gigantic...

Definitions of ’asset stripping’ and meaning of ’asset stripping’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’asset stripping’ and other financial terms with our online QFINANCE Financial Dictionary.

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