New Delhi: More than half of the companies across the world including Indian firms are likely to consider divestment of parts of their businesses due to deteriorating global economic situation and liquidity crunch, a latest survey by Ernst & Young says.
Frozen credit markets and a rapidly deteriorating global economy are driving an increasing number of distressed asset sales and historic deals, the survey titled “Divesting in turbulent times: Achieving value in a buyer’s market” stated.
The survey found out that globally more than half of respondents (53%) confirm they are more likely to consider divestments due to current economic events.
Moreover, nearly 68% of Indian respondents mentioned the continuing need to focus on the core business is the primary reason for planning a divestment.
Interestingly, about one-fourth of respondents globally anticipate emerging market buyers would be the main acquirers of assets in the next two years, the survey revealed.
“With limited cash and emerging economies set to become one of the key buyers of corporate assets worldwide, companies now need to think more creatively, prepare more carefully, act more decisively and with greater flexibility to ensure their deals are successful...,” E&Y India Transactions Advisory Services Partner and National director Ranjan Biswas said.