Divestitures and People Issues - Mercer

Divestitures and People Issues - Mercer

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In the world of M&A, successful acquisitions require keen attention to people-related issues. However, the flip side of M&A, the divestiture, may require even greater process and rigor in order to successfully handle the complicated people challenges that can arise.

Companies that pride themselves on having mastered acquisitions may find themselves in uncharted territory when it comes to divestitures. Poorly executed divestitures can result in some very real and unfortunate outcomes, such as unanticipated resource needs, costly ongoing transition service agreements, long and painful separations, and loss of critical talent – all which contribute to deterioration of morale and damage to reputation.

As with an acquisition, HR plays a critical role in the decisions and actions needed to meet the organization’s overall objectives.

While the decision to divest can be driven by the need to rebalance a portfolio, strategically reorganize, or raise capital, the common goal in all cases is to maximize price. As with any complex initiative, organizing the process into defined phases helps clarify the objectives, process, and actions needed to achieve the desired goals.

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