Strategic Key Success Factors for Divesting in the Nordics : A case study of divestitures advised by KPMG

Sammanfattning: Over the past decades, the divestiture market has steadily been growing but there are signals that indicate that a large portion of these transactions can be seen as unsuccessful. To improve the number of successful divestitures, the purpose of the study is to identify key success factors that can help firms to succeed with their divestitures in the Nordic market. Since this topic is not as widely researched as closely related fields, such as Mergers and Acquisitions, and the research that has been conducted has focused on the U.S. market, without a strategic focus, the contributions of this study are academically relevant. This study is conducted in a qualitative and abductive manner with a focus on two theoretical frameworks, Resource-Based View and Business Model Innovation. These theoretical frameworks have been used to create an analytical model together with theory and previous studies of divestitures. The analytical model was then applied to analyze the empirical data which was collected by interviewing professionals within the deal advisory industry at KPMG. Finally, conclusions were drawn based on the analysis. The conclusions drawn in this study are that the most common reason to divest is to refocus on the firm's core business which is done by divesting business units that spread the firm too thin and that are seen as unprofitable. To define what a successful divestiture is, firms can use five different categories of measurements which are (i) the selling price \& share price, (ii) the transaction speed \& completion of the deal, (iii) the speed of negotiations \& following the plan, (iv) having comprehensive transitional service agreements \& relationships, and (v) retention rates. The key success factors that contribute to a more successful divestiture in the Nordics are (i) planning the divestiture process, (ii) providing adequate resources, (iii) innovating the business model, (iv) managing key employees, and (v) stakeholder communication.