How can divesting fuel your future growth?

The Global Corporate Divestment Study is based on more than 900 interviews with corporate executives and focuses on how companies should approach portfolio strategy, improve divestment execution and future-proof their remaining business amid massive market disruptions.

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Key considerations
  • Divestments to focus on top-performing assets, particularly where technology can provide a competitive edge, are more likely to achieve a better sale price than those driven by opportunistic triggers.
  • Be cautious in divesting for geopolitical or macroeconomic reasons, as buyers will take a similar view of the risks; consider a broad auction to help retain pricing tension.
Consideration Biggest challenge
Understanding how technology impacts the value of our business
Consistently applying data-driven analytics to drive decision making
Identifying the right team to drive the process (i.e., the right set of skills from a business, technical and analytics perspective)
Overcoming emotional attachments to assets/conflicts of interest
Making the portfolio review process a strategic imperative
Improving communication between board/strategy team and M&A team
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Leading practices
  • Build a team with a mix of deep business knowledge, functional skills and analytics experience.
  • Lead with a data-driven story, supported by analytics to drive decision making and remove management bias.
  • Assess proprietary financial and operational data alongside external data to understand and communicate current valuation, growth objectives and return on capital.
Undertook Plan to use in future
Conducted ongoing discussions around portfolio review findings
Presented appropriate models, timelines and milestones related to transaction
Created a stakeholder communication plan
Explained the vision for the separated business and listened to employee concerns
Aligned work streams between internal stakeholders and service providers
Incentivized key executives to effectuate a successful transaction
Focused on the quality of the management team in the divested business
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Leading practices
  • Clear the right people early to make timely decisions.
  • Establish protocols to continue communication with stakeholders of any divested assets after the deal is done.
  • Couple communications with other strategies, such as incentives that reward executives on various measures of transaction success.
  • Consider your audience and use channels (e.g., social media) that align to their communication preferences.

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Leading practices
  • Show sustained improvements to the business before buyer diligence begins.
  • Remain flexible about deal structure.
  • Move quickly on tax assessment, and keep the buyer’s tax position in mind.
  • Prepare a detailed view of stand-alone costs for key functions (e.g., IT) with variations by buyer type or platform.

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Instructions: Mark your answers to each question and select "submit" to benchmark yourself against other corporate executives. Your selected answer(s) will be highlighted in yellow within each comparison chart.