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The results are in. And the findings are…
As the U.S. economy strengthens, divestitures are becoming more a matter of strategy than survival.
During the challenging economic conditions of the last few years, many divestitures were driven by the need to reinforce balance sheets, raise capital, and improve financial positions. While the ups and downs of the economy and market conditions will likely still play a big role in 2013 decision-making, divesting is becoming an important tool for implementing corporate strategic goals and making a statement in the marketplace.
With this heightened strategy comes a wave of tactical considerations to contemplate as you consider the important question: to divest or not to divest? And if yes, how to divest and to whom?
Using divestitures to advance corporate strategy demands careful financial analysis to prepare a deal for market, a clear communication strategy for disseminating divestiture plans to stakeholder groups, and a recognition of the need to be sensitive to employee morale during the process.
Divestiture survey report 2013
Deloitte surveyed nearly 150 executives regularly involved in divestitures to assess the past experience of their companies, their outlook for the future, and the challenges they face.
While some findings were consistent with the results of Deloitte’s 2010 survey, we did notice the emergence of some new, noteworthy themes:
Many companies are increasingly realizing that divestitures need to become part of their core strategy rather than simply a way to improve finances.
Careful preparation, including approaching the sale from the buyer's perspective, is important to increasing transaction value and reducing time-to-close.
Keeping employees motivated and providing clear line-of-sight into the divestiture strategy is critical to retaining and mobilizing talent around executing the transaction.
U.S. companies have historically preferred selling to domestic buyers, but a global perspective can result in more bidders and higher value.
Transaction Service Agreements (TSAs) are viewed as a necessary evil by many companies, but they can be used as a strategy to close deals.
Divestitures: Dig deeper
Divestiture Merger and Acquisition Library
U.K. Divestment Survey 2012
U.S. Divestiture Survey 2011
Corporate Development 2012
Merger & Acquisitions (M&A)
Deloitte Corporate Finance LLC
Learn more about the authors by clicking on their names below, to read their bio.
|Ellen Clark, managing director, Deloitte Corporate Finance LLC|
|Anna Lea Doyle, pricipal, Merger and Acquisition Services, Deloitte Consulting LLP|
|Andrew (Andy) Wilson, partner, Merger and Acquisitions Services, Deloitte & Touche LLP|
|Bob Coury, managing director, Deloitte Corporate Finance LLC|
|Jeff Weirens, principal, Merger and Acquisition Services, Deloitte Consulting LLP|
As used in this document, 'Deloitte' means Deloitte LLP. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.Certain services may not be available to attest clients under the rules and regulations of public accounting.
Deloitte Corporate Finance LLC ("DCF"), member FINRA, is a wholly owned subsidiary of Deloitte Financial Advisory Services LLP ("Deloitte FAS"). Deloitte FAS is a subsidiary of Deloitte LLP. Investment banking products and services within the United States are offered exclusively through DCF.