What explains the market reaction to divestiture: Announcements?

We show that announcements of divestitures by Australian firms induce a significant increase in shareholder value. While the extent of the market reaction depends on the relative size of the divested asset, high leverage and poor operating performance do not appear to generate higher returns. The application of quantile regressions reveals a high degree of asymmetry in the market reaction. We also find that increased focus through the divestiture of non-core assets is no longer associated with higher returns