Technological transformation, geopolitical uncertainties, overcapacities, increasing regulation for environmental and climate protection: These challenges and their effects necessitate strategic adjustments to business models and a restructuring of portfolios.
Yet companies that put a business unit up for sale often fail to find a suitable buyer, even with far-reaching concessions. It is then necessary to reassess the situation and examine the other options for divestment.
Optimize assets for the buyer's market or liquidate the business unit
Our white paper "Divestment Strategy" examines two options:
- Turnaround: Improve the performance of the business unit in question with suitable strategies. The aim is to increase attractiveness for potential buyers (or to keep the asset once it is back on track).
- Plant closures and liquidation: Two options are conceivable here - closing the business unit completely or relocating or selling parts of it and liquidating any remaining parts.
The resolution to close a plant and liquidate it is usually complex and is a far-reaching decision that should be planned carefully in terms of costs and time. This requires good communication with all relevant stakeholders, especially employee representatives.
Ultimately, the costs of a plant closure/liquidation need to be compared with the costs and opportunities of a turnaround so that companies can arrive at a data- and fact-based decision that also fits in with the overall corporate strategy.
Our white paper presents these two options and describes the decisive factors and steps in each specific case. In this way, it can be examined whether a turnaround or a plant closure and liquidation is a sensible alternative for divestment instead of a sale.
Florian Rieser
Partner, Deal Advisory, Head of Turnaround & Restructuring
KPMG AG Wirtschaftsprüfungsgesellschaft
