The ongoing economic crisis is forcing companies to divest their businesses and use the proceeds from the sale to improve their technological capabilities and increase their competitiveness, EY said the results of a global survey by international consultancy firm MTI on Thursday.
Ferenc Nagy, an expert in EY's transaction advisory business, emphasized in the announcement that the portfolio transformation will not escape the Hungarian subsidiaries of multinational companies either.
The announcement emphasizes that the benefits of sales are supported by past experience, with the average return on equity (TSR) of companies responding to the 2008-2010 global economic crisis by selling businesses between 2010 and 2018 exceeding those of companies leaving the portfolio unchanged.
The global survey surveyed more than 1,300 corporate decision-makers between November 2019 and May 2020, with three-quarters of respondents being senior executives.
65 percent of companies surveyed are forced to restructure their portfolios to prepare for the post-crisis era.
Fifty-seven percent of companies are thinking of divesting at least one line of business within 12 months, while 72 percent believe they should have sold some of their interests earlier.
54 percent of the managers surveyed said that as a result of the crisis, they will continue or accelerate the preparation and implementation of their transaction plans. The proceeds would be used by 52 percent of companies to fund new technology investments to keep pace with rapidly changing consumer needs.
(Source: marmalade.co.hu; MTI | Image: pixabay.com)