Banks, rubbish collectors and telephone companies have been allowed to complete acquisitions only if they make divestitures.
Two years after a buy-out, employment declines by 3% on average; if acquisitions, divestitures and new sites are included the losses are only 1% of initial employment.
In each of the past three years, several disposals have exceeded $10 billion in value.This year is shaping up to be a busy one for divestitures too, even though the broader mergers-and-acquisitions market is in the doldrums.
Because GE is so large, moreover, Mr Immelt will have to make big divestitures, too, if he really wants to change the complexion of his business.
Over the same period the total value of such deals soared from $539 billion to almost $1.5 trillion, as the average deal size increased.This year is shaping up to be a busy one for divestitures too, even though the broader mergers-and-acquisitions market is in the doldrums.
A second series of American divestitures and mergers began in the early 1990s.
With these divestitures, IBM shifted away from manufacturing so-called commodity products in order to concentrate on its computer services, software, supercomputer, and scientific research divisions.
To remain profitable, many companies have engaged in an almost continuous process of consolidations, mergers, divestitures, and international joint ventures and partnerships.
Emilie Feldman, an assistant professor of management at Wharton who has done a series of studies of divestitures, told me, "It isn't just the stock price.
The success of divestitures doesn't mean that mergers are always a mistake.
Even with the prospect of having to pay taxes on any divestitures, the discount may be sufficient to tempt an outsider to try to wrap up what Ms. Bartz has failed even to begin.
