Abstract circle

Analysis

US divestitures quarterly update

Explore the Q2 2021 update

Divestitures can be a key part of a company’s strategy, helping to refocus the business and improve overall performance. Divestiture mergers and acquisitions (M&A) news provides Deloitte Corporate Finance LLC insights and market data analysis that shed light on US and global divestiture trends.

US divestitures Q2 2021 update

Our quarterly report focuses on:

  • US divestiture volume, value, and reported multiples
  • US divestitures by buyer type
  • US divestitures by industry
  • Cross-border activity

Overall trends1

M&A and divestiture activity has continued to build on its momentum in Q2 2021. Divestiture volume jumped to 639 deals in Q2 2021 compared with 474 in Q2 2020. As the pandemic has continued to reshape the business environment and company strategy, divestitures have remained an important tool for companies to focus attention and investment around core business operations. Divestitures have simultaneously served as a means of improving capital structure through cash infusion and debt paydown, evidenced by the continued decline of the S&P 500’s debt/EBITDA ratio over the five quarters since the pandemic began. Divestiture activity shifted toward smaller transaction sizes, with divestitures of less than $250 million increasing by 15% over Q1 2021 to 42% of divestitures. Likewise, divestitures in excess of $1 billion decreased by 14% from 40% of divestitures in Q1 to 25% in Q2. Overall, M&A and divestiture activity is poised to remain strong in the second half of 2021 as companies continue to grapple with rapidly evolving competitive landscapes.

neon hair tie

Global activity2

Q2 2021 witnessed a shift in divestiture activity away from overseas acquirors toward North American acquirors. In the Americas, divestiture activity increased 8.3% over Q1 2021, with 550 transactions completed. US buyers completed 518 deals, up from 487 in Q1 2021, followed by Canada with 28 deals, increasing precipitously from 16 in Q1 2021. Divestitures to European and Asian buyers declined by 13.2% and 16.7% from Q1 2021, respectively, with European buyers completing 46 divestitures and Asian buyers completing 15. In Europe, the United Kingdom continues to be the most active acquiror, with 19 deals completed, up 72% from 11 in Q1 2021. The United Kingdom was followed by Sweden, which completed six transactions, doubling its Q1 2021 total. In Asia, China returned to previous levels of activity, with Chinese acquirors completing four deals, following a Q1 2021 without a single US divestiture acquisition. India followed China with three deals completed, trailed by Japan, South Korea, and Singapore with two deals each.

interconnecting neon dots and lines

References

1,2 Thomson ONE. https://www.thomsonone.com, accessed April 24, 2021. Data as of March 31, 2021.

This newsletter is a periodic compilation of certain completed and announced merger and acquisition activity. Information contained in this newsletter should not be construed as a recommendation to sell or a recommendation to buy any security. Any reference to or omission of any reference to any company in this newsletter shall not be construed as a recommendation to sell, buy, or take any other action with respect to any security of any such company. We are not soliciting any action with respect to any security or company based on this newsletter. This newsletter is published solely for the general information of clients and friends of Deloitte Corporate Finance LLC. It does not take into account the particular investment objectives, financial situation, or needs of individual recipients. Certain transactions, including those involving early stage companies, give rise to substantial risk and are not suitable for all investors. This newsletter is based on information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. Prediction of future events is inherently subject to both known risks, uncertainties, and other factors that may cause actual results to vary materially. We are under no obligation to update the information contained in this newsletter. We and our affiliates and related entities, partners, principals, directors, and employees, including persons involved in the preparation or issuance of this newsletter, may from time to time have “long” and “short” positions in, and buy or sell, the securities, or derivatives (including options) thereof, of companies mentioned herein. The companies mentioned in this newsletter may be: (i) investment banking clients of Deloitte Corporate Finance LLC; or (ii) clients of Deloitte Financial Advisory Services LLP and its related entities. The decision to include any company for mention or discussion in this newsletter is wholly unrelated to any audit or other services that Deloitte Corporate Finance LLC may provide or to any audit services or any services that any of its affiliates or related entities may provide to such company. No part of this newsletter may be copied or duplicated in any form by any means, or redistributed without the prior written consent of Deloitte Corporate Finance LLC.

Did you find this useful?