Divestment Survey 2012
Is breaking up hard to do?
Markets have always found it easier to understand acquisitions than divestments. Acquisitions are exciting and positive, a sign that a company is moving forward, while divestments have often been viewed as a retrograde step, a sign of failure. Whereas companies have traditionally explained acquisitions in terms of added value and beneficial for earnings, divestments have been seen as a harder sell.
That divestments create value is more than conjecture: in a recent Deloitte report it was found that divestments are viewed favourably by investors. This is particularly true in the mid-market, where two-thirds of companies completing divestments outperformed their index. Further Deloitte research has also indicated a huge (92%) rise in divestments from £130bn in 2011 to £250bn in 2012 as companies restructure their business portfolios to bolster their balance sheets.
This survey assesses and analyses the success of companies that have made recent divestments in a number of key areas. In particular the survey focuses on where they created value, and where value is left on the table.
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