Carrying out a successful privatization: The YPF case

The Argentine national oil company, YPF, was drastically restructured and sold to the public in an initial public offering during the early 1990s. This process of privatization was the most successful large-scale one in Argentina during the period, and it serves as a useful benchmark for other privatizations in other countries and contexts. The most important internal strategic factors that contributed to the success of this privatization were: (1) the redefinition of core businesses and elimination of non-core activities; (2) the restructuring of the organization and personnel to fit the core business; and (3) the positioning of the firm for sale to private-sector investors. The most important external factors that contributed to the success of this privatization were: (1) the government's firm and clear position on the issue, and the creation of a legal framework to permit privatization of YPF and deregulation of the industry; and (2) the identification of key pressure groups and defusing of their efforts to oppose the privatization.