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How stranded costs can make or break success of divestitures
May 13, 2025 @ 11:00 am – 12:00 pm EDT
Free
1 CPE credit
Divestitures can be a tool to streamline businesses weighed down by non-core assets. However, companies may see lower shareholder returns if they don’t stay focused on their cost base when contemplating a divestiture. Our research shows divestitures can fail to improve near-term profit margins. In fact, 51% of companies that divested assets in the last two decades experienced a profitability drop greater than 3.3 percentage points after the first year1, we’ll discuss:
- Possible impacts of divestitures on post-deal profitability
- Complexities introduced through Transitional Service Agreements
- Strategies to mitigate stranded costs
1 Capital IQ and Deloitte Analysis
