From BP and Centrica, to Unilever and Nestlé, multinationals are accelerating the sale of noncore assets as they try to eliminate their balance sheets and pay off debt amid the epidemic.
The coronovirus epidemic is forcing companies to reevaluate their major divisions and focus on high-growth areas, bankers and merger and acquisition lawyers say.
Read:Here’s how investors should place bets on stocks that are selling noncore assets
According to financial data provider Refinitive, companies have sold 8,895 noncore assets globally for a total of $ 391 billion so far this year. In 2019, there were 11,294 asset sales valued at approximately $ 415 billion for the same period.
However, the number is still low – amid a widespread downturn in overall M&A – with bankers saying the executive is picking up conversations about the split between teams, as they shift resources to core activities and pay off debt. We do.
Marathon Petroleum MPC,
The $ 21 billion sale of its gas stations to owners of 7-Eleven convenience store chains already in August is the latest sign that the trend is beginning to pick up.
It follows BP’s BP,
The sale of its petrochemicals business to INLD for $ 5 billion in June, as oil prices fell due to the coronovirus crisis, necessitated reductions in oil costs and restructuring. A month later, Centrica CNA, owner of British Gas,
In order to focus on the UK and Ireland, the US integrated power firm NRG Energy signed a deal to sell its North American subsidiary Direct Energy for $ 3.63 billion.
In the consumer goods sector, Unilever UNA,
Nestle wants to sell its tea brands PG Tips, Lipton and Brooke Bond and all of their tea estates, after a six-month review of NESN.
It said in June that it could divest most of its North American water division, including the Poland Spring and Pure Life brands.