Suffering from more than 15 years of its stock underperforming the broader indices, 125 year old General Electric (GE) announced a dramatic downsizing of the corporation in December 2017. The firm’s restructuring plan involved streamlining its operations to three core businesses: power generation, aviation, and healthcare. GE will shed more than $20 billion in assets including its transportation, lighting, and oil field operations, as well as its 65% stake in oil field services provider Baker Hughes. The new restructuring plan comes on the heels of the firm’s sale of its media, plastics, appliances, and most of its financial services businesses in recent years. Despite its restructuring efforts, GE’s market value continued to slide resulting in its replacement by Walgreens Boots Alliance Inc. in June 2018 as one of the 30 stocks comprising the iconic Dow Jones Industrial Average.

Part V addresses strategic growth options as alternatives to domestic M&As, including corporate restructuring programs, business alliances, and cross-border M&A deals. This section also discusses what can be done if corporations believe more value can be created by exiting certain businesses or product lines or by reorganizing or liquidating either outside of or under bankruptcy court protection.

Chapter 15 describes the common motives for entering business alliances, ranging from minority investments to joint ventures, as well as the critical success factors for establishing alliances. Reasons for employing alternative legal forms, ways of resolving common deal-structuring issues, and the implications of the recent changes in US tax laws for business alliances also are addressed. The advantages and disadvantages of the various types of alliances are discussed in detail as well as what a manager should consider in choosing the type of business alliance most appropriate for the circumstances.

The emphasis in Chapters 16 and 17 is on portfolio restructuring rather than organizational (i.e., revamping a firm's internal processes) or financial restructuring (i.e., altering a firm's capital structure). Portfolio restructuring involves selling, shutting down, or spinning off money-losing operations or those not fitting with the firm's core business strategy. It is often a response to intensified competition or technological change and frequently causes firms to be acquired, reorganized in bankruptcy, or liquidated, resulting in their elimination as independent corporate entities. Reflecting these factors, the average life span of S&P 500 corporations has been declining from an average of 90 years in 1935 to less than 20 years today. Chapter 16 describes how corporations choose from among a range of restructuring options, including divestitures, spin-offs, split-ups, equity carve-outs, and split-offs to improve shareholder value. Chapter 17 focuses on failing firms that may attempt to preserve shareholder value by negotiating voluntarily with creditors to restructure their debt outside of bankruptcy court. Alternatively, such firms may choose or be compelled to seek the protection of the court system.

Finally, Chapter 18 describes motives for international expansion, widely used international market-entry strategies, and how to value, structure, and finance cross-border deals. This chapter carefully notes the adjustments that should be made when valuing a target firm in an emerging or developed country. Important tax considerations (including the 2017 US tax legislation) and their potential impact on cross-border deals also are addressed.