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Don't forget to prune your portfolio

Divestitures can yield significant shareholder value when designed to command an optimal price.

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Companies that regularly prune their portfolio, take an active hand in preparing assets for sale, manage the separation and use the sale funds to acquire core assets in a repeatable M&A programme make divesting a win-win for buyers and sellers.

THERE are many reasons why executives shy away from divesting non-core businesses. They're reluctant to shed revenue, fear the market's reaction to a smaller company and don't want the challenge of stranded costs. They reason that the business could improve in time, or have trouble accepting the...

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