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Companies including Unilever and Kraft Heinz announced more than $1tn of asset sales in 2025, the highest level in three years, as businesses came under pressure from activist investors to simplify and reignite growth.
Total asset sales and divestments had already reached nearly $1.2tn through mid-December across nearly 7,000 transactions, according to data provider Dealogic, the highest level since 2021.
Conglomerates have fallen out of fashion as investors gravitate towards focused businesses in a challenging and uncertain economic environment. Activist hedge funds are putting management teams of such businesses under pressure to boost valuations by streamlining operations and freeing up cash.
“When you simplify the portfolio and sharpen the equity story in an uncertain environment, these are lower-risk transactions,” said Philipp Beck, head of M&A in Emea for UBS. “It’s typically easier to do a carve-out than a big bolt-on, or some sort of transformational transaction.”
A spate of break-ups has hit the consumer sector, which is struggling with persistently high inflation, subdued consumer spending and changing customer preferences.
Kraft Heinz said in September it was planning to separate its slower-growth grocery staples from its sauces, spreads and seasonings business, best known for the Heinz brand, unravelling a deal that created the packaged food group a decade ago.
Other leading examples include Unilever’s spin-off in December of its ice cream division, named The Magnum Ice Cream Company, and Keurig Dr Pepper’s plan to separate its coffee and soft drinks businesses, after it completes a €15.7bn deal to buy European coffee chain JDE Peet’s.
In the media industry, which is also being upended by disruptive forces, Warner Bros Discovery announced plans in June to split its declining cable TV assets from its streaming and studios arm. The proposal catalysed a bidding war between Netflix and Paramount.
“Corporate carve-outs have been an important source of large M&A in 2025,” said Stephen Pick, Barclays’ head of Emea mergers and acquisitions. “We expect that to continue into 2026 as simplification and capital recycling into higher growth, higher returning businesses remain a focus in boardrooms, in many cases catalysed by activist pressure.”
Other deals remain in the works. FTSE 100 conglomerate Associated British Foods announced in November that it is exploring a separation of its fast-fashion chain Primark from its food business.
Many industrial groups have also taken steps to unwind in 2025, such as New York-listed agricultural supplier Corteva, which is splitting its seed and pesticides businesses.
Meanwhile, BP is in talks over a sale of its $8bn Castrol lubricants arm, cement company Holcim has spun off its North America division and Honeywell has announced plans to split into three companies, caving into pressure from activist Elliott Management.
“You’re seeing big companies break up at a faster clip because as companies have gotten larger, they have component pieces that are scaled, market-leading companies in their own right,” said Tom Miles, global head of M&A at Morgan Stanley.
This past year has been a record year for activist campaigns, with a Barclays report finding that 191 had been carried out in the year to October.
Smiths Group — one of the UK’s last, listed industrial conglomerates — sold two of its business units after coming under pressure from activist investors including Elliott.
Private equity firms are often the natural buyers of divested assets, taking them off the hands of companies in the belief that managing them in a more focused way can improve their valuations.
