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Divestiture: meaning, definitions and examples

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divestiture

 

[dɪˈvɛstɪtʃər ]

Definition

Context #1 | Noun

business

The action or process of selling off subsidiary business interests or investments.

Synonyms

disinvestment, sell-off, spin-off.

Which Synonym Should You Choose?

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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.

  • The regulator ordered the divestiture of the subsidiary to prevent a monopoly.
  • The company announced a divestiture of its non-core business units to focus on its primary operations.
disinvestment

Used to describe the withdrawal of capital investment in a company, industry, or country, often for ethical, political, or economic reasons.

  • There has been significant disinvestment in coal industries due to environmental concerns.
  • The government is concerned about the ongoing disinvestment in the region.
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.

  • The sudden sell-off of shares caused the stock market to plunge.
  • In response to the crisis, the company initiated a massive sell-off of its assets.
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.

  • The tech giant announced a spin-off of its cloud services division.
  • After the spin-off, the new company will operate independently from its former parent.

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.

Interesting Facts

Etymology

  • 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.

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.

Translations

Translations of the word "divestiture" in other languages:

🇵🇹 alienação

🇮🇳 विलेपन

🇩🇪 Veräußerung

🇮🇩 divestasi

🇺🇦 відчуження

🇵🇱 zbycie

🇯🇵 撤退

🇫🇷 cession

🇪🇸 desinversión

🇹🇷 elden çıkarma

🇰🇷 매각

🇸🇦 تصرف

🇨🇿 odprodej

🇸🇰 odpredaj

🇨🇳 撤资

🇸🇮 odprodaja

🇮🇸 sölu

🇰🇿 бөліп алу

🇬🇪 გაყიდვა

🇦🇿 satış

🇲🇽 desinversión

Word Frequency Rank

Positioned at #22,419, this word is part of extensive vocabulary. It's relatively rare in general usage but may be important in specific fields or formal writing.