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Seven Secrets of Highly Effective Divestitures


 The number of large scale divestitures around the world increased significantly over the last few years. Judging by recent trends, the future looks to be just as dynamic. In a changing economy, companies continue to announce divestitures as a tool to optimize the portfolio in search for shareholder returns. Of course, signing a divestiture agreement is only the first step toward creating shareholder value through a spin-off.

Given the incredibly high stakes, what can management teams do to improve their chances for an effective long-term outcome? To answer this question, Deloitte Consulting LLP (Deloitte Consulting) recently conducted a study of 15 large and complex divestitures, including: Sprint Nextel’s spin-off of Embarq, Agilent Technologies’ carve out of Avago, IBM’s sale of its personal computer business to Lenovo, and Verizon’s sale of its Hawaiian Telecom unit.

Our study revealed seven key practices that companies should consider before getting involved in a spin-off.

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