Can Divestiture Advisory Prevent 1 in 3 Failed UK Asset Sales

 

Divestiture Advisory

In an evolving and often unpredictable UK corporate environment, the challenge of executing successful asset sales has intensified. Recent market data shows that roughly 29 per cent of sell-side assignments in the UK fail to reach a closed deal due to valuation mismatches, financing challenges, regulatory issues and strategic shifts by sellers and buyers alike. In this context, effective divestiture consulting has emerged as a critical tool for companies seeking to navigate complex transactions, improve deal success rates, and protect value for shareholders. If nearly one in three UK asset sales falter before completion, the question must be asked: can robust divestiture advisory services materially reduce this failure rate and foster more predictable outcomes for sellers and buyers alike? 

Asset sales in the UK are not trivial undertakings. In 2025, overall mergers and acquisitions activity saw a contraction; UK M&A deal value in the first half of 2025 was £57.3 billion, a 12.3 per cent drop compared to the same period in 2024, accompanied by a 19.1 per cent reduction in transaction volume. This climate of reduced deal flow, combined with economic uncertainty and valuation gaps between buyers and sellers, has increased the frequency of stalled or failed transactions. Data suggests that even when buyers are interested, around 29 per cent of assignments end without a transaction, a figure that strongly underscores the practical need for expert advisory support.

Strategic divestitures are vital for businesses aiming to refocus operations, deleverage balance sheets, or unlock shareholder value. Major players such as BP have pursued significant asset sales, including the planned sale of a 65 per cent stake in its Castrol lubricants division, valued at $10.1 billion and expected to complete by the end of 2026. Yet, behind headline transactions are countless smaller mid-market deals that never reach fruition, often due to avoidable execution pitfalls.

Understanding Why UK Asset Sales Fail

Before examining how divestiture advisory can help, it is essential to unpack why many asset sales do not complete successfully. Key barriers include:

Unrealistic Valuation Expectations: Sellers often enter the market with value expectations misaligned with buyer perceptions or market realities. This disconnect can lead to prolonged negotiations and eventual deal collapse.

Financing Difficulties: Potential buyers may struggle to secure the right mix of equity and debt financing, particularly in tighter capital markets or where macroeconomic uncertainty persists.

Poor Strategic Positioning: Without a clear narrative about why a divestiture creates value for buyers, assets can languish in the market, deterring potential suitors. This is especially true in sectors with complex regulatory environments or specialised technology offerings.

Regulatory and Compliance Complexity: UK transactions often involve detailed regulatory reviews that can delay or derail deals, particularly cross-border transactions or situations where national interest concerns arise.

The 2026 Global Divestiture Survey by Deloitte highlights that externally induced deal abandonment such as shifts in strategy or failure to engage qualified buyers early remains a significant contributor to the roughly one-third of divestitures that stall before signing. 

Given these structural challenges, reliance on standard internal deal teams or ad-hoc advice is often insufficient. This is precisely where professional divestiture advisory and divestiture consulting can deliver measurable benefits.

What Divestiture Advisory Brings to the Table

Divestiture advisory encompasses specialised consulting services focused on maximising value and improving successful outcomes for asset sales. These services typically include:

Strategic Preparation and Target Profiling: This involves rigorous pre-deal analysis to ensure assets are accurately valued and positioned to attract the right buyer cohort. Advisory teams use extensive market data, benchmarking and buyer mapping to refine offer strategy.

Buyer Identification and Engagement: Professional advisors maintain broad networks of strategic and financial buyers, enhancing the pool of prospective acquirers. This increases competition and helps mitigate the risk that a sale collapses due to lack of interest.

Transaction Structuring and Due Diligence Management: Advisors assist in organising information memoranda, managing vendor due diligence, and structuring deal terms that balance seller expectations with buyer requirements, speeding the path to signing.

Negotiation and Deal Execution Support: Expert negotiators can bridge valuation gaps and craft creative solutions to financing issues, increasing the likelihood that a transaction progresses from offer to completion.

Post-Deal Integration and Transition Planning: Beyond execution, advisory firms help plan for Day One operational readiness, reducing integration risk and ensuring continuity for the divested business.

These functions directly respond to the primary causes of deal failure. For example, addressing unrealistic valuations up front through robust market analysis reduces the friction that often leads to stalled negotiations. Similarly, active buyer outreach and structured buyer engagement increase the likelihood of securing competitive offers and avoiding the 29 per cent non-closure rate recorded in recent UK sell-side assignments.

Quantifying the Impact of Divestiture Consulting

While specific outcome statistics for advisory engagements can vary, numerous industry studies and surveys emphasise that deals backed by professional advisory services have higher completion rates and tend to achieve better financial outcomes. According to industry insights from the Dealsuite UK & Ireland M&A Monitor, sell-side assignments supported by formal advisory expertise achieved an overall 71 per cent success rate, meaning transactions were concluded successfully compared to the broader UK average.

If nearly 3 in 10 asset sales fail without expert guidance, the improved success rate associated with structured advisory suggests that divestiture consulting can realistically reduce failure rates by a meaningful margin. This is particularly the case when advisory teams align seller expectations, refine deal positioning and proactively manage buyer engagement from the outset.

Sector Dynamics and the Role of Advisory in 2025 and Beyond

In 2025, the UK market faced mixed signals. Although overall deal value contracted, there were pockets of robust activity. For example, UK financial services saw M&A value double during the year, reflecting concentrated interest in high-value targets despite broader market caution. 

However, the broader M&A landscape exhibited marked volatility. In the first half of 2025, deal activity declined significantly, leading to what some commentators describe as a “restrained momentum” environment. In such conditions, sellers benefit disproportionately from professional guidance because the margins for error are slimmer and buyer interest more selective.

This dynamic is likely to continue into 2026, where tempered optimism is expected but not guaranteed. According to CMS’s 2025 outlook, UK dealmakers anticipate more activity as economic stability improves, but earlier headwinds have not entirely abated. In this context, divestiture advisory will remain a valuable differentiator, particularly for mid-market businesses and private equity firms managing portfolio exits.

Case Illustration: Strategic Divestitures and Advisory Value

Consider a hypothetical UK mid-market technology business seeking to divest a non-core division. Without external advisory support, the seller might struggle to identify appropriate buyers, misprice the asset, and face prolonged negotiations that exhaust internal resources. In contrast, with experienced divestiture consulting partners, the same seller can benefit from:

Buyer Shortlisting and Early Engagement: Tapping into a curated list of strategic buyers and financial investors.

Valuation Benchmarking: Leveraging market multiples and sector insights to set competitive yet realistic price expectations.

Structured Negotiation Roadmap: Facilitating term negotiation that reconciles seller objectives with buyer deal economics.

The result is faster market traction, higher quality bids, smoother due diligence, and an elevated probability of closing the transaction.

As the UK asset sale environment continues to evolve amidst economic uncertainty and shifting dealmaking patterns, the value of structured divestiture advisory and divestiture consulting cannot be overstated. With roughly one in three transactions failing to complete under traditional sell-side approaches, professional advisory services offer a pathway to improved outcomes by addressing core deal execution challenges from valuation to buyer engagement and negotiation.

For companies and investors evaluating strategic asset sales in 2025 and beyond, the empirical evidence underscores that engaging seasoned advisory partners increases the likelihood of successful transactions, enhances financial returns and ultimately protects shareholder value. By integrating expert divestiture consulting into deal preparation and execution, organisations can significantly reduce the risk of failure and achieve more predictable, favourable outcomes in even the most challenging market conditions.