What is Divesture?
Divesture is the sale or disposition of an asset. You may also hear divesture referred to as divestiture or divestment. There are a number of reasons to choose to get rid of assets, and a variety of ways in which such assets can be disposed of. In a simple example of divesture, a company which focuses on the manufacture of cars might choose to divest itself of a division which handles experimental aircraft, under the assumption that the division is worth more on its own, and that it distracts from the company’s key mission. One of the most common motivations for divesture is economic. Simply put, when an asset is no longer making money for its parent company, the company may choose to sell or otherwise dispose of it before it becomes a liability. Likewise, companies may spin off divisions which would be more profitable on their own, or be encouraged to sell divisions and assets which are more valuable to potential buyers than they are to the company. Sometimes, divesture is carried out
Related Questions
- Should the BRA divest of the leaseholds at Possum Kingdom Lake, is there an estimate on the amount of time necessary to process the sale of the land?
- Why do you choose to invest in hotel properties when most international chains are moving to divest ownership and concentrate on management?
- What is Divesture?
