The value in divestitures, a PwC study

We’re exploring the truth about divesting.

Why are we studying divestitures?

To collect corporate portfolio renewal best practices

Inflation is rising. So are interest rates, supply chain costs and cost of capital. CFOs know a portfolio approach to their business is the key to long-term shareholder returns. In other words: capital discipline. Yet companies aren't divesting in line with previous M&A cycles. In fact, the acquisition to divestiture ratio is at a 20-year high.

The fact remains, active portfolio management ⁠— doing both acquisitions and divestitures ⁠— generates the highest excess returns over industry peers. Then why do some companies decide not to divest at all? What prevents companies from making timely divestiture decisions?

When and how to let a business go in order to grow

A divestiture is a journey that can create value for the seller. However, many factors influence whether or not a company decides to divest. The research will uncover which factors have the greatest impact on seller return.

The study spans three phases of the divestiture process — portfolio review, divestiture execution and reinvestment. It explores a wide range of internal and external influences across four broad categories: context and market, structure, process and psychology.

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Why are dealmakers reluctant to divest?

About the study

Research expertise

In designing and performing the study and extracting insights from the data, we collaborated with two experts:

  • Emilie R. Feldman, Michael L. Tarnopol Professor and Professor of Management at The Wharton School of the University of Pennsylvania. Her research focuses on corporate strategy and the role divestitures play in corporate reconfiguration.
  • Curt Moldenhauer, a retired PwC partner and doctoral candidate at St. Mary’s College of California. Curt serves as Deals Fellow, advising on PwC Deals thought leadership.


Often, research methods rely on either historical or survey data. We endeavored to go further. To test our hypotheses, we built a theoretical model and gathered data using a three-pronged approach. Sources of qualitative and quantitative data includes:

  • Interviews with 29 senior members of management and boards of directors with decision-making responsibility
  • Surveying of more than 2,000 senior leaders with meaningful knowledge of strategy, portfolio review and/or the divestiture process
  • Historical seller company and business unit financial and deal data analysis

Contact us

Michael Niland

US Divestitures Services Leader, PwC US

John D. Potter

Deals Sector Leader, PwC US

Elizabeth Crego

Deals Partner, PwC US

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