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Creating Shareholder Value Through Divestitures

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While 55% of divestitures create immediate value, choosing the right exit route is key to maximizing that value. In this infographic, BCG reveals the particular parameters that companies need to asses when choosing their particular exit route. Read the full report: http://on.bcg.com/1tVU8aH

Published in: Investor Relations, Business

Creating Shareholder Value Through Divestitures

  1. 1. DON’T MISS THE EXIT CREATING SHAREHOLDER VALUE THROUGH DIVESTITURES Spin-off to the company’s shareholders ROUTE 2 ROUTE 3 Trade sale to another buyer ROUTE 1 Companies can choose from THREE EXIT ROUTES THE RIGHT ROUTE depends on the interaction of three parameters The financial strength, profitability, and strategy of the parent company The volatility, valuation levels, and point in the cycle of the market The industry, quality, and innovativeness of the asset 1 2 3 INCREASE6.6% T H E B O T T O M L I N E I S Companies that make the right decisions experience, on average, a 6.6% increase in shareholder value in the days following a divestiture announcement. Carve-out, in which the parent company sells a partial interest to the public while retaining ownership Four out of five shareholders believe companies should divest more aggressively !CAUTION 55% of all divestitures are immediately value-creating But choosing the right exit strategy goes a long way toward determining whether a divestiture is a success Read BCG’s latest insights, analysis, and viewpoints at bcgperspectives.com © The Boston Consulting Group, Inc. 2014. All rights reserved. To find the latest BCG content and register to receive e-alerts on this topic or others, please visit bcgperspectives.com. Please direct questions to socialmedia@bcg.com.

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