Time to breakup? Which UK stocks might benefit from selling assets
Selling assets is a fashionable activity for UK stocks: WH Smith announced this morning that it is exploring a possible sale of its high street business to focus on its travel trade, following in the footsteps of Reckitt Bensicker, Marston’s and DCC, all of which have sold assets to unlock value recently.
The news from WH Smith came hot on the heels of speculation that Diageo might be looking to sell or spin off its Guinness business, a rumour later denied by the company.
“Selling assets to focus on what companies do best is a logical strategy. ‘Shrink to greatness’ is a way to describe this approach and it’s in vogue,” investment analyst at AJ Bell Dan Coatsworth said.
“Asset sales are often the result of a company’s strategy evolving over the years and going in a different direction to the original business model.” Coatsworth added. “At some point, companies realise it’s not worth having fingers in so many pies.”
FTSE 100 distribution group DCC said last November that it would focus solely on energy and sell its healthcare division, while mining giant Anglo American agreed the sale of its remaining coal business in the same month.
Pub group Marston’s sold its stake in Carlsberg to focus on pubs last year, THG demerged from Ingenuity at the start of 2025, and Dettol-maker Reckitt Bensicker announced a huge sell-off of brands last July. City PM is owned by Ingenuity.
Which UK stocks might be next?
Coatsworth suggested that several other companies would benefit from shedding assets – notably Unilever, ITV, Sainsbury’s and international equipment rental company Ashtead.
“[Ashtead’s] UK arm is tiny compared to the rest of the group and selling it would enable management to focus on one continent [North America],” he said.
Similarly, he said that ITV’s Studios arm “could be worth more than the whole market value of the entire group”.
“Content creation is big business and ITV’s Studios arm has a solid track record of producing shows that bring in a large audience… a buyer such as Netflix could access these skills and a rich back catalogue of content.”
Coatsworth said that Sainsbury’s “stuck in the mud” goods arm Argos could be the “next step in its journey”, while Unilever has several food-related brands that look “ripe to be sold”.
“[Unilever] could be open to selling Bovril, Colman’s and Maille – all iconic brands that should easily find a willing buyer looking to give them more attention.”
Unilever has already announced plans to demerge its ice cream arm, sold a water purification business, and accepted an offer for its Unox and Zwan brands.