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Divestment

This article covers business divestments, for the social and political uses of divestment, see Disinvestment.

In finance and economics, divestment or divestiture is the reduction of some kind of asset for either financial goals or ethical objectives. A divestment is the opposite of an investment.

Divestment for financial goals

Often the term is used as a means to grow financially in which a company sells off a business unit in order to focus their resources on a market it judges to be more profitable, or promising. Sometimes, such an action can be a spin-off. (For the United States); Divestment of certain parts of a company can occur when required by the Federal Trade Commission before a merger with another firm is approved. A company can divest assets to wholly owned subsidiaries.

The largest, and likely most-famous, corporate divestiture in history was the 1984 U.S. Department of Justice-mandated breakup of the Bell System into AT&T and the seven Baby Bells.

External links

• Institute of Mergers, Acquisitions and Alliances (MANDA) M&A - An academic research institute on mergers & acquisitions, incl. divestments

See also

• Consolidation (business)
• Corporate finance
• Corporate social responsibility
• Demerger
• Divestment campaign
• Enterprise value
• Financial economics
• Mergers and acquisitions
• Tax resistance