A divestiture is tough to do, from the first business case decision through to effectively controlling post-close risk. McKinsey documents that those companies that have a divestiture strategy alongside acquisition, return between 1.5 and 4.7 percent better shareholder returns than those that only are involved in acquisitions. Divestitures create value to energy and chemical companies.
In divestiture activities, we’ve noticed that most companies focus on the net proceeds as the primary value driver. Whereas there are two others that demand attention: a.) accretive shareholder value due to focus on core business operations, and b.) the reduction or elimination of post-close liabilities. Leading companies take all three into account when evaluating divestiture activities and value creation.