2024 Global Corporate Divestiture Survey
Amid uncertainty, new muscles for new possibilities
In our latest Global Corporate Divestiture Survey of mergers and acquisitions (M&A) and restructuring leaders, we explore not only the latest trends in divestiture, but also its changing role in corporate strategy. A wholly realized M&A approach is really what we might call an M&A&D approach.
Inconsistent trends, but a clearer path to sustained readiness
Except for a pandemic-related spike in 2021, where total global divestiture value topped US$1 trillion, the volume and value of divestitures and spinoffs has remained largely stable in recent history. The outlier year, 2021, found many organizations divesting non-core assets to free up cash after the pandemic slowed and shuttered so much business activity. The next year, 2022, brought just as rapid a cool-off to pre-pandemic levels, in part because ready buyers had been accommodated, and in 2023, volume and value declined even further.
With the most significant market disruption seemingly behind us, are organizations focussing on divestiture-readiness for 2024 and beyond? The latest market data suggests that there is a positive outlook for renewed M&A activity, including divestitures, as this survey indicated that dealmaking is likely to rebound, with fewer than 2 percent of respondents saying their organizations plan no sell-side activity, and almost 80% anticipate three or more divestitures in the next year and a half. It is likely that sellers remember the heightened activity of 2021 and have an appetite to make divestitures a more regular part of their plans but need to bolster that muscle memory with additional capabilities that can keep them divestiture-ready in the long run.
Divestiture is a critical instrument in the corporate growth toolbox, and the organizations that remain divestiture-ready in their outlooks can be better prepared to benefit from it than organizations that hold it at arm’s length as a necessary evil reserved for times of crisis. To be divestiture-ready doesn’t necessarily mean to pursue that course more often. It means to pursue it more effectively as divestiture-ready organizations can achieve better outcomes in terms of transaction value, separation cost and effort, stakeholder ambiguity and concern, and growth opportunities for the remaining organization. When divestiture outcomes match or exceed expectations, it is no accident, and preparation makes a difference, not only transaction by transaction but as an ongoing aspect of the company’s transaction-readiness. Our research suggests five focus areas where practice and sustained muscle building can make a difference in preparing organizations.
Read the full report and learn how your business can improve outcomes and emerge from the corporate divestiture process as a more resilient company.
About the survey
Data for this survey was collected from 500 individuals at private or public companies with revenues of at least $500 million, that completed at least one divestiture in the past 36 months. More than half (55%) of respondents represented firms with more than US$1 billion in revenue. Respondents held senior director-level or above roles, with most of the respondents (80%) sitting within the C-suite. Industry representation was controlled for a balanced distribution, and participation was balanced across major geographic regions (Asia, Europe, and North America). The survey was conducted from October 6 to October 20, 2023.
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