Definition Divestiture. Description.
A Divestiture in corporate strategy is the sale, liquidation,
or spin-off of a corporate division,
or subsidiary. Often to focus the resources of the corporation on a market
it judges to be more profitable or promising, or to increase the focus on
its Core Competence. Focusing the
resources of a firm on one or a few core businesses is usually better then
taking diversification too far
and spreading resources and overstretching the
span of control of management.
A divestment can also occur when required by a government agency such as the
Federal Trade Commission or European Commission before a merger is approved.
Finally, there are also examples of divestments for
corporate responsibility
reasons, such as the withdrawal of firms from South-Africa during the 1980s
due to the Apartheid regime at the time.
In finance and investing, it is the disposal of an investment
by sale, liquidation or other means.
A synonym for it is divestment. It is the opposite
of an investment.
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Compare with: Spin-Off
| Leveraged Buy-Out
| Management Buy-Out
| Exit Strategy |
Synergy |
Parenting Advantage |
Parenting Styles |
Growth Phases |
Joint Venture |
Special Purpose Vehicle
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