DEFINITION of 'Denationalization'

The act of changing a government-run firm into a private-sector firm. In order to accomplish this transition, the government must either sell or otherwise redistribute the formerly government-run firm in a way that is equitable to citizens.

Denationalization is also known as "privatization".

BREAKING DOWN 'Denationalization'

A recent example of denationalization can be found in the formerly government-owned Japan Post Group. This group of companies provided postal services, banking and insurance products in Japan. However, the group was unable to turn a profit under government management. As part of an ongoing campaign to cut government spending, the Japan Post Group was denationalized by the Japanese government.