First Nestlé, then Unilever, here’s what these multinationals are doing to boost growth

© Bloomberg Unilever is considering selling some of its tea brands, including PG Tips.

From BP and Centrica, to Unilever and Nestlé, multinationals are accelerating the sale of noncore assets as they look to shore up their balance sheets and pay down debt amid the pandemic.

The coronavirus pandemic is forcing companies to reassess their core divisions and shift focus to higher-growth areas, say bankers and mergers and acquisitions lawyers.

“Crises, like near death experiences, focus the mind in a way that is not always possible during a booming economy,” said Frank Aquila, global head of M&A at international law firm Sullivan & Cromwell. “So whenever there is an economic downturn, the seemingly difficult decisions become easy because they become obvious. An economic downturn precipitates accelerated Darwinism, a business must adapt quickly to survive,” he added.

CONSTELLATION BRANDS, INC.

Read: Here’s Why Investors Should Bet on Stocks That Are Selling Noncore Assets

So far this year, companies globally have sold 8,895 noncore assets worth a total of $391 billion, according to financial data provider Refinitiv. That compares to 11,294 asset sales worth almost $415 billion for the same period in 2019.

While the numbers are still low — amid a wider slump in overall M&A — bankers say conversations about divestments among executive teams are picking up, as they look to divert resources to core activities and pay off debt.

Marathon Petroleum’s (MPC) $21 billion sale of its gas stations to the owners of the 7-Eleven convenience store chain earlier in August is the latest sign that the trend is starting to accelerate.

It follows BP’s (BP) sale of its petrochemicals business to Ineos for $5 billion in June, as the decline in oil prices fueled by the coronavirus crisis sped up the oil major’s need to cut costs and restructure. One month later, British Gas owner Centrica (UK:CNA)struck a deal to sell its North American subsidiary Direct Energy for $3.63 billion to U.S. integrated power firm NRG Energy, to concentrate on the U.K. and Ireland.

Elsewhere in the consumer goods sector, Unilever (NL:UNA) is looking to sell its tea brands PG Tips, Lipton, and Brooke Bond, and all its tea estates, following a six-month review, while Nestlé (CH:NESN) said in June it could divest the majority of its North American waters division, which includes the Poland Spring and Pure Life brands.