The sale or disposal of an asset. Divesture takes place when a company (or any form of going concern) sells off a division, unit or subsidiary (or a collection of assets), or broadly speaking, business interests or investments. In which case, it is said to have divested itself of the asset or group of assets, which no more appear as part of its operations and consequently on its balance sheet.
Divesture involves either partial or full disposal of an asset/ assets. For example, a company may sell off part, or all, of a subsidiary to divest itself of it for a specific reason or purpose.
Divesture may also involve situations where a government or government agency sells off an entity (or certain strategic assets) by means of privatization, in which it transfers a business, industry, or service from public to private ownership and control.
Divesture is also spelled divestiture (now mainstream form).
Comments