The corporate breakup party shows no signs of cooling down. Companies with a combined market value of about $1 trillion are pursuing plans to split up their businesses. One of the world’s largest institutional investors and a European energy giant are the latest to join the fray.
The trend, though not new, is picking up pace as investors pressure chief executive officers to drive value and improve corporate governance by simplifying business structures. Some of the world’s most iconic companies, including General Electric Co., Johnson & Johnson and Toshiba Corp., have announced plans to break up in a move away from the conglomerate model.
The number of companies hiving off divisions is providing a once-in-a-lifetime opportunity for buyout firms to deploy capital. Private equity firms could yet move for GlaxoSmithKline Plc’s consumer health business. Elsewhere in the U.K., Informa Plc this week agreed to sell 85% of its Pharma Intelligence division to Warburg Pincus for 1.7 billion pounds ($2.3 billion).
Blackstone Inc. and Carlyle Group Inc. are in talks about potentially teaming up on a bid for Swiss drugmaker Novartis AG’s generics unit, in what could rank as one of the biggest-ever buyout deals, Bloomberg News reported this month. Bain Capital and CVC Capital Partners formed a consortium to study a bid for Walgreens Boots Alliance Inc.’s international drugstore business, which could be valued at as much as 7 billion pounds.
