Divestiture
The action or process of selling off subsidiary business interests or investments.
It's the opposite of an acquisition or merger, involving the strategic shedding of assets or business units, often to focus on core competencies, raise capital, or comply with antitrust regulations.
Word relationships
- Sale: A general term; 'divestiture' specifically refers to the strategic selling off of business interests.
- Spin-off: A specific type of divestiture where a new independent company is created from a division, rather than sold to another entity.
- Acquisition: Buying a company or assets.
- Merger: Combining companies.
Commonly confused with
- Liquidation: Liquidation is selling off all assets to pay debts and close a company. Divestiture is selling off parts of an ongoing business.
Word family
- divest (verb): To rid oneself of something; to sell off assets.
Collocations
- strategic divestiture
- asset divestiture
- forced divestiture
- portfolio divestiture
Example sentences
- "The conglomerate announced a major divestiture of its non-core assets to streamline operations and reduce debt." Reporting on corporate restructuring.
- "Antitrust authorities often mandate divestiture of certain business units to prevent monopolies after a large merger." Discussing regulatory requirements.
Memory hook
To 'DIVEST' is to 'DE-VEST' (unclothe) a company of its assets. DIVEST = DE-VEST.
When not to use
Do not use 'divestiture' for a simple sale of a minor asset like office furniture. It refers to the sale of a significant business unit, subsidiary, or investment.
Fun facts
- Divestitures can be voluntary (strategic) or involuntary (mandated by regulators).
Related words
Explore more words
antitrust, disengagement, diversification, outsourcing, deregulation, Diversify
Also appears in
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