84% of companies plan to divest within the next two years

The intent to divest remains at record levels — 84% of companies plan to divest within the next two years, consistent with last year’s record of 87%. Despite uncertainty from tariffs, a trade war, desynchronized growth and geopolitical concerns, the market offers sellers a resilient yet competitive environment.

Faced with evolving sector landscapes, businesses are continuously evaluating their growth strategies and competition. They are more rigorous in portfolio management — two-thirds (66%) of companies say they review their portfolios at least every six months, according to the latest EY Capital Confidence Barometer survey — and they continue to actively dispose of underinvested assets best left in the hands of another owner. This disciplined approach to portfolio management is working. More companies are divesting for strategic reasons as opposed to because of a failure in the business: companies that cite a unit’s weak competitive advantage as a driver in their latest divestment fell significantly to 69% from 85%.The result is a streamlined operating model that gives companies the ability to quickly execute on their capital agendas. Eighty-one percent of companies say streamlining the operating model will factor into their divestment plans over the next 12 months, while two-thirds (67%) say this was a factor behind their most recent divestments.