The EY 2020 Global Corporate Divestment Study – 72% have held onto assets too long

The EY 2020 Global Corporate Divestment Study reveals divestment activity is poised for a sharp rebound as companies rebalance portfolios. More companies than ever (72%, up from 63% in 2019) say they have held onto assets too long. At the same time, our latest survey suggests that the economic downturn is providing an impetus for sellers to take action, with more than three quarters (78%) planning a divestment. 78% of the respondents said that they expect to divest within the next 2 years. Divesting is a way to generate cash in order to invest elsewhere and we have lately seen the first examples of divestments triggered by the COVID-19 crises in order to generate cash to protect the core business. Divestors in the near-term might see declining multiples but, as we learned from the financial crisis – companies divesting in the downturn emerged from the crisis in a stronger position and generated higher returns for their shareholders than their peers, so this might well be the time to act. And as with everything else, preparations are key – we have a very strong local team with great credentials that can support the journey.

Learn more?
1. Download The EY 2020 Global Corporate Divestment Study
2. Visit the global campaign website with all the insights.
3. Contact Jasper Knol Bruins via jasper.knol.bruins@nl.ey.com /+31 88 40 72096 / +31 6 21251365
4. Subscribe for the Global Webcast here
 

Authors:
Loren Garruto, EY Americas Corporate Finance Leader
Kevin Deeble, Senior Director of M&A Finance, Cisco Systems
Charles Honnywill, EY UKI Divestment Leader
Rich Mills, EY Global and Americas Divestment Leader