The Hope for Shareholder Value - An in-depth case study on how financialization is manifested as managerial promises of future shareholder value creation, even when there is no external pressure

Abstract: This thesis draws upon an in-depth case study of Atlas Copco's reorganization through a demerger of its Mining and Rock Excavation Technique business area into two separately listed entities (Atlas Copco and Epiroc). Through interviews with the senior executives initiating and participating in the demerger, in combination with owner representatives, business journalists, and financial analysts following the companies, this study sought to explore how financialization is manifested in managerial promises of future shareholder value creation. The study findings nuance previous literature through the observations that the structural reorganization sought to ensure focused boards and management teams in order to maintain optimal horizontal processes in the respective firms. Thus, our findings open for debate whether the short-term shareholder value primacy emphasized in the financialization literature prevails as the focal point advocated by public corporations. We further argue for a contrast with the previous financialization domain's discourse of reactive reorganization, where companies have largely been thought to be managed by the markets, while the case study indicated how the firm rather appeared to 'instruct' external actors on how to interpret the communicated value drivers. Finally, it is suggested that the case company may have been able to utilize its historical track record of strong financial performance when it initiated a transaction largely built upon promissory aspects in the value rationales, and that this promissory decision could yield an effect on others rather than the company itself.