Divestiture Meaning: Definition, Examples, and Translations
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divestiture
[dษชหvษstษชtสษr ]
Definition
business
The action or process of selling off subsidiary business interests or investments.
Synonyms
disinvestment, sell-off, spin-off.
Which Synonym Should You Choose?
| Word | Description / Examples |
|---|---|
| divestiture |
Commonly used in legal or business jargon when a company divests itself of an asset. It often involves regulatory or strategic considerations.
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| disinvestment |
Used to describe the withdrawal of capital investment in a company, industry, or country, often for ethical, political, or economic reasons.
|
| sell-off |
Informal, commonly used to describe the act of selling large volumes of assets, stocks, or business units, often quickly and possibly due to urgent financial needs or strategic shifts.
|
| spin-off |
Refers to the creation of an independent company through the sale or distribution of new shares, often when a parent company separates part of its operations to create a new entity.
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Examples of usage
- The divestiture of the company's non-core assets helped improve its financial stability.
- After the divestiture, the company focused on its core business operations.
- The divestiture was necessary to streamline the company's operations.
- Divestiture can be a strategic move to enhance a company's profitability.
- Successful divestiture can lead to a more efficient allocation of resources.
Translations
To see the translation, please select a language from the options available.
Interesting Facts
Business
- Companies often divest to focus on their core activities or improve profitability by shedding unprofitable divisions.
- This strategy can lead to increased stock prices if investors believe the company will be more efficient after shedding assets.
Legal
- In antitrust cases, divestiture can be ordered by governments to prevent monopolistic behaviors by forcing companies to sell certain assets.
- Failure to comply with divestiture orders can result in hefty fines or additional legal action.
Pop Culture
- Divestiture is often mentioned in media portrayals of corporate takeovers, highlighting the tension between maintaining and breaking business ties.
- Films like 'The Big Short' touch upon corporate strategies, including divesting, during financial crises.
Economics
- Divestiture can impact market dynamics by increasing competition when major players are forced to sell parts of their operations.
- The act of divesting can sometimes lead to a more efficient allocation of resources in an economy, driving innovation.
Origin of 'divestiture'
Main points about word origin
- The word comes from the Latin 'divestire', meaning 'to undress', implying taking something away.
- It combines the prefix 'di-' (apart) with 'vestiture' (dressing), hinting at removing layers of ownership.
The word 'divestiture' originated from the Latin word 'divestire', which means 'to undress' or 'to strip off'. In the business context, 'divestiture' refers to the process of selling off assets or business interests. The practice of divestiture has been used by companies to improve financial performance, refocus on core operations, or comply with regulatory requirements. It gained popularity in the 20th century as companies sought to rationalize their portfolios and optimize resource allocation.