Senior executives often have a hard time letting go. When it comes time to decide whether to sell certain assets, particularly those that have become less relevant to the core business, many bosses hold on for too long, only to watch as value withers and the assets become costly distractions. Others are simply more focused on acquiring1 or turning things around and, as a result, fail to prune noncore assets or divest even those businesses that destroy value. The effect on shareholder returns is more than you might imagine: our analysis of the largest 1,000 global companies finds that those that are actively involved in both acquiring and divesting create as much as 1.5 to 4.7 percentage points higher shareholder returns than those focused primarily on acquisitions.
