Managing Global Benefits During Divestiture

Managing Global Benefits During Divestiture
May 7, 2026 5 mins

Managing Global Benefits During Divestiture

Managing Global Benefits During Divestiture

As more organizations divest non-core operations, a critical challenge has emerged — establishing fit-for-purpose, cost-effective employee benefits for newly formed businesses in compressed timeframes. Effective solutions exist that simplify and accelerate implementation.

Key Takeaways
  1. For divested companies, separating from the corporate parent can introduce complexity in sustaining comparable employee benefits without the economies of scale.
  2. Buyers need immediate operational readiness, meaning companies should ensure a benefit infrastructure that allows for continuity from day one.
  3. A turnkey solution that helps with speed, complexity and cost results in smoother transitions.

There were $1.6 trillion worth of divestitures and spinoffs in 2025, a 30% increase.1 But the impacts go beyond these dollar figures because of the number of employees affected. Divestiture can help a company unlock and redeploy capital, reduce risk exposure, focus on core business and sharpen its portfolios.

These transactions, however, carry people risks like retaining talent, especially when benefits cannot be replicated. This can make an already challenging transaction more difficult. Having a solution that allows for a seamless transition while satisfying needs from parties on both sides of the deal can allay talent concerns, build employee engagement and pave the way for a smooth transition.

Why Divestitures can be Difficult for HR:

When divesting a business, there are potential pain points that require attention.

  • 01
    Disentangling

    Separating people, benefits, retirement plans and HR operations from legacy corporate structures is not as easy as moving names in organizational charts. Employee transfer can be complex and subject to varying regulations in different countries.

  • 02
    Speed

    Many transactions happen on a compressed timeline, but buyers still expect clean, ready-to-operate assets.

  • 03
    Portability

    Benefits like healthcare, group insurance and defined benefit pension plans may not neatly transition to a new corporate structure, especially where the new entity lacks the same economies of scale as the legacy company.

  • 04
    Regulatory

    Governance issues can pose challenges, especially in places with heavy regulation or union considerations.

  • 05
    Small Populations

    Matching benefits can be challenging where traditional solutions are too expensive or are not available.

Buyers Want Clarity, Predictability and Flexibility

Companies looking to divest should consider what will attract buyers. An important part of that is having a benefits structure that is ready on day one, eliminating or minimizing the need for a transition services agreement.

Quote icon

These are complex transactions, so minimizing employee disruption, especially when it comes to something as important to people as their benefits, is key to accelerating deal value.

Aaron Chaum
Human Capital M&A Leader, North America

Another buyer priority is having a go-forward, cost-efficient benefit model that minimizes employee disruption and attrition. Continuity is preferable so that employees have greater familiarity and the company has adequate flexibility. A solution that can leverage the same vendors at the same level of benefits negates the need for lengthy RFP and vendor identification processes.

Transparency is also key — buyers don’t like surprises. This is especially true of pension programs and their obligations, severance policies and compliance gaps that will need to be addressed. These are all things that may alter the financial picture of a deal.

The Bottom Line: What buyers need is HR and benefit infrastructure that is in place from day one and ready to operate seamlessly in the new company, without incurring significant costs.

3 Best Practices for Implementing Global Benefit Transitions

  • 1. Due Diligence

    The work of preparing a global benefit plan for the divested company starts early. Due diligence involves an inventory of relevant benefit plans, including retirement, health insurance, equity, compensation and other non-insured benefit policies covering in-scope employees.

  • 2. Proactive Audit

    An analysis of costs and obligations that not only includes both pension liabilities and benefit expenses, but also change-in-control or severance payments triggered by a transaction is needed. A proactive audit of benefits data, systems and administrative processes can surface issues early, allowing time to mitigate them and provide buyers with a credible plan for moving forward.

  • 3. Continuity

    After the audit, continuity of benefits is crucial. The selling company should commit to replicating the benefits package employees receive. This often means setting up comparable benefit plans like a separate retirement plan, along with the transfer of assets and liabilities that go along with them. New health insurance policies should go into effect on day one, and communications should be developed in advance to let employees know about changes to their plans. Regulatory approvals from pension regulators or trustees, for example, should be secured in advance to avoid gaps. In addition, union approvals may be needed where collectively bargained contracts exist.

The Bottom Line: Core HR and benefit infrastructure must be ready to stand up on day one. Interruptions to HR operations like pay or benefits delivery when ownership changes can be extremely disruptive.

Solutions to Accelerate Transactions and Mitigate Risk

To ensure optimal employee experience, the divested company should aim to mirror the benefits typically offered by larger organizations wherever feasible. A program designed to do this should consider the following areas:

  • Retirement Savings Plans: A multi-employer plan can provide the economies of scale needed. These plans offer the cost efficiency and broad investment options of larger plans, allow for quick migration and can allay regulatory concerns while reducing governance burdens.
  • Benefits for Global Small Populations: Many times, a divested business that was formerly part of a global company will have a smaller headcount across a number of different countries. While catering to these smaller, dispersed populations individually can be prohibitive, benefits should be provided via a standardized package with pre-negotiated supplier terms. This will allow for a similar level of benefits that these employees were accustomed to. “A proprietary small population solution can help execute these divestments in a seamless, cost-effective way,” says Bruno Monteiro da Silva, Aon’s Global Benefits Consulting Leader in Europe, the Middle East and Africa. “Pre-negotiated purchasing agreements across benefits and pensions allow companies to access better pricing, better coverage and faster implementation than they could achieve on a standalone basis.”
  • Proper Infrastructure: Beyond core benefits, having the right infrastructure in place can address key people concerns. For example, companies divesting to buyers who are in a different market or geography may need to benchmark people-related costs. Companies who are selling the divested company to another established company may profit from benefits harmonization modeling, providing options for the new company in combining workforces.
  • Employee Communication: Workers want to know that their benefits will continue uninterrupted and at the same level as before. Having reliable communications will help allay concerns. Where there are differences (new vendors, variations in plan design), change management will be needed.

Aon’s Turnkey Solution Provides Day 1 Readiness

Aon’s global human capital sell-side turnkey solution allows for HR separation in as little as 12-16 weeks with minimal drain on a seller’s HR resources. It does this by accessing our existing knowledge the organization (where applicable), accelerating the design and decision-making process, avoiding lengthy RFP/vendor selection processes, and leveraging Aon’s deep M&A expertise globally. Operating as an integrated team to combine M&A transaction specialists with benefit, retirement and local market experts across dozens of countries, Aon provides a divestiture playbook that accelerates readiness, reduces execution risk and provides peace of mind for employer and employees alike.

Aon's Thought Leader:

Bruno Monteiro da Silva
Global Benefits Consulting Leader, Europe the Middle East and Africa

With contributions from Aaron Chaum, Fan Sun and Marquie Leelatham.

1 Global M&A trends: Navigating a rapidly rebounding market, McKinsey

General Disclaimer

This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

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