Divestiture Agreement

Suppliers or customers may not be in time in their responses to confirm any communication and grant the requested rights. In the worst-case scenario, some suppliers may take advantage of this opportunity to collect a one-time royalty for the granting of transfer or assignment rights or increase the royalty to supplement their revenue stream. Similarly, some customers may try to exploit the transaction and increase their royalties or advertising fees. To address these issues, companies should prioritise these suppliers throughout the contract separation process and cooperate with the supplier`s customer managers to ensure the necessary separation rights. The use of “gateway” agreements – where the parent company and suppliers agree to amend the contract to allow the assignment to either use the license places or use the services for the rest of the contract – is an option. After the conclusion of the transition contract, DivestCo is often required to enter into a new contract directly with the technology provider. As already mentioned, contract separation is a central element for a successful first day for parents and DivestCo. It is also one of the few separation management processes, where the desired outcomes depend on the right level of engagement from multiple internal and external stakeholders. However, in the early stages, it is very often accepted that the rights reserved to customers and suppliers to give their consent to the assignment of the contract or to allow transitional services as well as the time required to negotiate the necessary sales rights are recognized in a limited way. In its simplest form, an assignment is the sale or sale of an asset by a company, a way of managing its portfolio of assets. As companies grow, they may find that they are operating in too many activities and they have to close some business units to focus on more profitable lines. Many conglomerates are facing this problem.

The division was bought by Onex and Baring Private Equity for $3.55 billion in cash.