divestment

Definition

Refers to the sale of an asset for financial, legal or personal reasons. For corporations, divestment can refer to a company selling off a portion of its assets, such as a subsidiary, to raise capital or to focus the business on a smaller core of goods and services. For investors, divestment can be used as a social tool to protest particular corporate policies, such as a company trading with a country known for child labor abuses. Divestment can also be required of companies by the Federal Trade Commission in order to have a merger approved. A famous example of this is the breakup of Bell System (Ma Bell) into AT&T and the Baby Bells in 1984. opposite of investment.

Use divestment in a sentence

We sold off a portion of our assets and I learned that we were doing a divestment and I was surprised that it had a name.

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The divestment of the property was a tough decision for the individual however it was necessary one to remove the potential liability.

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In order to get their proposed merger approved by the Federal Trade Commission, the company agreed to the divestment of some of their assets to quell antitrust concerns from consumer advocates.

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divestiture divided cover