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Laxman Pai, Opalesque Asia:

Nearly half of corporate M&A professionals at private companies say they are likely to spin off a non-core division in 2023, said a survey.

According to a recent Deloitte poll, against the backdrop of continued economic uncertainty, inflation, and rising interest rates, nearly half (47.9%) of M&A professionals say they are likely to pursue a divestiture in the coming 12 months.

Among those contemplating divestitures, 40.4% of those polled say their organizations are likely to pursue 1-2 divestitures in the year ahead while 7.5% say their organization may pursue as many as 3-4.

Of M&A professionals who report plans to pursue a divestiture in the coming year, more than half (54.4%) say their organizations are most likely to pursue a sell-off (e.g., the sale of a business unit or company to another organization).

IPO-oriented equity carve-outs (13.8%), spin-offs (13.8%), and parent company dissolutions or de-mergers (3.3%) are less likely to occur in the next 12 months, according to those polled.

According to nearly one-quarter (24.2%) of M&A respondents, the need to divest non-core assets is most likely to drive organizational divestiture plans over the next 12 months, followed closely by the need to raise cash to support future operations (20%) and the need to strengthen balance sheets (19.8%).

Yet, successful diligence is necessary to execute divestiture plans, and buyer-requested diligence is expected to increase in the comin......................

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