Previous divestment norms no longer apply in a volatile economy, according to an Ernst & Young report. Companies need to be more creative, prepare more carefully, and act more decisively and with greater flexibility to ensure their deals are successful. One of the biggest changes has been the time available to put a deal together.
Only about one-third (36%) of sellers surveyed for the report believed their recent divestments had met expectations. Sixty-two percent cited “lack of time” to prepare for divestments as the biggest obstacle to a successful divestment. Historically, almost two-thirds considered at least six months necessary to successfully execute a deal—a time frame that might not be available in today’s economy.
The report, Divesting in turbulent times: Achieving value in a buyer’s market, surveyed 360 C-suite executives at companies around the world. E&Y said the survey suggests that companies must maintain a heightened state of readiness across their portfolios and be prepared to exit all or parts of their business on very short notice.
Source: Ernst & Young, www.ey.com.