Business Divestiture


Definition: a Business Divestiture is the disposal of an existing business (unit) by a firm through sale, exchange, closure or bankruptcy.
A divestment is the opposite of an investment.
A BD could be performed for a number of reasons: focus on core operations, obtain funds to pay off debt, break-up-value is greater than the value of the firm as a whole, decrease risk (due to a risky business), underperformance, regulatory requirement, shareholder pressure.


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