Crown Jewel

Crown jewel

A particularly profitable or otherwise particularly valuable corporate unit or asset of a firm. Often used in risk arbitrage. The most desirable entities within a diversified corporation as measured by asset value, earning power, and business prospects; in takeover attempts, these entities typically are the main objective of the acquirer and may be sold by a takeover target to make the rest of the company less attractive. See: Scorched earth policy.

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Crown Jewel

1. A particularly valuable or important asset that a company owns. For example, a car manufacturer's three best producing factories may be considered its crown jewels.

2. Describing an antitakeover measure in which a company sells many or all of its crown jewel assets. A crown jewel policy is designed to make the company less attractive to potential acquirers. The obvious disadvantage to a crown jewel policy is the possibility that, even if the company remains independent, the lack of its crown jewels may render it unable to maintain its operations easily. It is a type of scorched earth policy. See also: Poison pill, Suicide pill.

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crown jewel

1. A prized asset of a company.

2. Used to refer to a part of a business that is sought by another firm or an investor in a takeover attempt that is hostile to the target firm's management. Compare scorched earth.