It may come as a surprise that companies are less likely to see asset sales as an integral part of their M&A strategy over the next two years, according to Herbert Smith Freehills’ new cross-border M&A survey Beyond Borders. Almost half (46%) of respondents have no intention of making any divestments at all.
With this in mind, and given the high volume of respondents who are intending to make acquisitions, this could mean a shortage of top-quality opportunities and continued high valuations for the best assets.
However, in line with the growth in cross-border acquisitions, among those companies that are planning to sell off assets, well over half (60%) expect to be making disposals in overseas markets.
Among those businesses that are considering divesting, the most common reason, cited by 53% of respondents, is a desire to offload under-performing businesses. More than a third (36%) of businesses are planning to consolidate in order to focus on their core business, while almost as many (35%) want to make divestments in order to reduce debt.