The trend: More companies are looking to shed underperforming assets or overhaul their business structures to strengthen their operations in an uncertain environment.

• Yum Brands is exploring strategic options for Pizza Hut, including a sale, as the chain continues to lose market share in the US and elsewhere.
• Starbucks sold a 60% stake in its China business to private equity firm Boyu Capital for $4 billion to accelerate recovery in its second-largest market.
• Denny’s agreed to be taken private by investors TriArtisan Capital Advisors, Treville Capital Group, and Yadav Enterprises for $620 million.
• Associated British Foods is considering spinning off Primark as a standalone business to better support the apparel company’s outsize growth.

The backdrop: With the global economy on increasingly shaky footing due to geopolitical tensions and trade disputes, it’s no surprise that companies are moving to mitigate risk either by slimming down or seeking partners to help extract greater strategic value from their assets.

• Yum’s decision to explore alternatives for Pizza Hut comes as little surprise: The chain has consistently underperformed compared with Taco Bell and KFC, Yum’s other brands. Pizza Hut’s share of the US pizza market has fallen by nearly 4 percentage points over the past five years, per Barclays data, as rivals like Domino’s lean into value, promotions, and delivery partnerships to gain sales.
• For Starbucks, bringing on a local partner with a deep understanding of Chinese consumers is essential to its ability to survive in a highly competitive landscape that is increasingly favorable to local brands like Luckin Coffee.
• Denny’s acceptance of the buyout offer puts the struggling restaurant chain in a better position to execute its turnaround, away from public market scrutiny.

Downsizing: Break-ups are also becoming more common as companies look to sharpen their focus and maximize shareholder value.

• AB Foods is positioning the split between Primark and its food business as an opportunity for each to receive its proper share of investor attention. Still, the company’s embrace of a move it has resisted for years comes amid a slowdown in both its retail and food segments.
• Kraft Heinz, Unilever, and Keurig Dr Pepper are among other conglomerates looking to break up their companies to allocate more resources to core profit generators and promising growth areas, rather than continue to support underperforming product lines.

Our take: With economic conditions still highly turbulent—and likely to remain so for the foreseeable future—companies must take decisive action to protect their bottom lines. Those most likely to weather the volatile macro environment will be the ones that simplify and focus operations, whether by exiting underperforming businesses, forming local partnerships in key growth markets, or reallocating resources toward brands, categories, and geographies with the clearest path to profitable growth.