2022 Global Divestiture SurveyRealizing value in a fast-paced market ContentsIntroduction 3About the survey 4Section 1: Divestiture activity is brisk 5Section 2: Deal values are strong 8Section 3: Execution hurdles 11Section 4: Prepared sellers, stronger outcomes 15Conclusion 18Endnotes 19Contacts 20 32022 Global Divestiture Survey | Realizing value in a fast-paced marketIntroductionAs companies gain distance from the deepest disruptions of the pandemic, and continue to grapple with supply chain and labor concerns, they have good reason to review the business mix in their portfolios. Given the dramatic economic and market changes of the past two years, companies can benefit by weighing what still fits and will create value for shareholders, as well as what needs to go and will have more value under new owners. Portfolio review is essential in times of crisis, and the combination of offensive and defensive M&A strategies that we anticipated at the onset of the pandemic1 has come to pass as companies seek to safeguard core markets, accelerate transformation, and position themselves to capture market leadership. As we expected, companies are now adopting defensive measures, such as divestitures of non-core assets, to enhance their portfolios for the long term. They may be adjusting the portfolio for greater digitalization or to increase sustainability. They may be addressing more fundamental issues too—whether each business activity supports their corporate purpose, for example, or whether it helps to build resilience for what comes next.Market data shows the pace of divestitures has significantly quickened, with the number of divestitures completed globally more than doubling from 2020 to 2021.2 Corporate leaders also report in our 2022 Corporate Divestiture Survey that they have done more divestiture transactions in the recent past and expect to do more in the future, as seen in section 1 of this report. And we hear anecdotally from clients that they are actively weighing options for non-core operations and exploring diverse types of divestitures to unlock shareholder value. Our survey responses show major changes in the way organizations think about divestitures, which we detail in section 2. The pandemic is playing a primary role in driving divestiture strategy, and eager buyers are plentiful. Companies can now prioritize speed and secured financing while allowing competitive pressure to drive price when choosing a buyer, and the valuations received in divestiture transactions have gone up markedly. Prices are getting a boost from a strong overall M&A market in which the value of global deals soared to nearly $5 trillion in 2021.3 The survey results also show room for companies to improve outcomes. A relatively small group of respondents realize positive outcomes across key metrics—transaction value, speed to completion, and limited business disruption—based on the responses we outline in section 3. This research and client experience both suggest there is greater success possible for sellers that regularly review the portfolio and have a clear focus on the financial, operational, and structural steps that are needed to be ready for an exit. As we explore in section 4, these prepared sellers can make gains across all the ways we measure outcomes—and emerge from the divestiture process as a streamlined and more resilient company. About the surveyData for this survey was collected from 500 individuals at private or public companies with revenue of at least $500 million that completed at least one divestiture in the past 36 months. Respondents were senior director-level or above, and the survey sought to balance C-suite and non-C-suite managers. Industry representation was controlled for a balanced distribution, and participation was balanced across major geographic regions (Asia-Pacific, Europe and Middle East, and Americas). The survey was conducted from October 14 to November 12, 2021.This is our fifth divestiture survey in the past decade, allowing us to track key trends related to strategy and execution over time.4 In particular, we are able to compare our most recent survey with data from the 2020 report (collected in late 2019, just before COVID-19 spread around the world), providing insights about how the pandemic has affected divestiture strategy and execution.42022 Global Divestiture Survey | Realizing value in a fast-paced marketAmericasAsia-PacificEurope and Middle East 2022 Global Divestiture Survey | Realizing value in a fast-paced