One in 10 businesses belonging to the telecommunications, media and technology (TMT) sector claims that divestment is the prime focus of their mergers and acquisitions (M&A) strategy.

22%, meanwhile, claim that they are giving equal priority to divestments and acquisitions.

However, a study conducted by the Eversheds law firm said that it is becoming increasingly difficult for the TMT sector to sell their business.

The time spent for completion of a transaction has increased an average of three to six months on a routine deal, and it has increased by one to two years for larger deals.

The study revealed that TMT businesses found IP transfer to be the common problematic area for divestment, followed by employee transfer.

According to the companies, IP and employee transfer had most of its value tied up in intangible assets, which made the process more difficult.

All the respondents were keen on completing disposals rapidly in order to reduce uncertainty related to asset’s ownership and performance issues.

However, respondents belonging to the telecom sector preferred slower sale processes, which could help the buyer to maintain and improve the asset’s performance, whereas tech and media businesses had growing concerns regarding asset’s value going to peak following the disposal.

Some of the TMTs had concerns regarding lack of clarity surrounding data privacy laws, and the transfer processes were becoming more complicated.

According to Eversheds, companies need to adopt clear and cooperative approach to communicate with buyers, maintain steady contact local management at the target company, build flexibility into legal contracts, and plan for delays.

Eversheds law firm partner Daniel Hall said: "Put simply, breaking up is becoming much harder to do. Separating assets is increasingly complicated in the TMT sector due to the centralised nature of many organisations. 2015-2017 is likely to see more separations as C-suite executives look for better returns on capital ratios.

"Deal teams must have the opportunity to prepare their businesses for the challenges they face on complicated divestments.

"This requires a much closer working relationship between the lawyers negotiating deal terms and regulatory clearances, and the operations team executing the commercial transaction and separation plans – a point that came through very clearly from the businesses involved in the study."