Managing a Business Divestiture

January 1, 2002

1 Min Read
Managing a Business   Divestiture

Originally Published MX January/February 2002


Managing a Business Divestiture

When selling a business unit, company leaders must be prepared to address the concerns of all stakeholders at once—beginning with those of employees.

Paul Touhey

The decision to sell a business, the assets or a division of a business, or a wholly owned subsidiary company, is never one that corporate executives make trivially or take lightly. Companies divest and sell assets for various reasons dictated by market realities, including the need to raise cash or to focus on opportunities for a higher return on investment, or the understanding that an asset might perform better under different ownership.

Paul Touhey is senior vice president at Fujirebio Diagnostics Inc. (Malvern, PA) and chairman of the Medical Device Manufacturers Association (Washington, DC), an industry trade association.

Businesses are often divested when corporate leaders determine that they no longer fit with the future vision of the enterprise or, in the case of an acquired business, that the initial acquisition was a mistake. Many times the decision to divest comes as the result of a normal process of screening a product-line or business portfolio, evaluating the original reasons for entering that business,

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