Divestment

AAA

DEFINITION of 'Divestment'

The process of selling an asset. Also known as divestiture, it is made for either financial or social goals. Divestment is the opposite of investment.

INVESTOPEDIA EXPLAINS 'Divestment'

Generally you'd just say that you are selling an asset. The term divestment is more appropriate however in the following contexts:

1) A change in corporate strategy - a firm might say that they are divesting a particular subsidiary to focus on their core business.

2) Social goals - there are many political reasons why investors might reduce investments. A notable example was the withdrawal of American firms from South Africa during apartheid.

RELATED TERMS
  1. Discontinued Operations

    A segment of a company's business that has been sold, disposed ...
  2. Social Responsibility

    The idea that companies should embrace its social responsibilities ...
  3. Socially Responsible Investment ...

    An investment that is considered socially responsible because ...
  4. Protest Divestment

    The intentional selling of stock or other assets on a large scale ...
  5. Asset

    1. A resource with economic value that an individual, corporation ...
  6. Investment

    An asset or item that is purchased with the hope that it will ...
RELATED FAQS
  1. What are the due diligence basics for investing in a startup?

    Due to the risk involved in investing in a startup, it is important to undertake due diligence to improve your chances of ... Read Full Answer >>
  2. What is a "socially responsible" mutual fund?

    As the name suggests, socially responsible mutual funds invest exclusively in socially responsible investments. Securities ... Read Full Answer >>
  3. Can anyone own common stock in a company?

    Any investor on the stock market can purchase common stock. However, in some ways common stock owners have fewer rights than ... Read Full Answer >>
  4. How do you transfer common stock from one broker to another?

    Common stock shares are most commonly transferred from one broker to another by a system known as the Automated Customer ... Read Full Answer >>
  5. Why is the 1982 AT&T breakup considered one of the most successful spinoffs in history?

    AT&T had a history reaching back to 1885 and, as a government-supported monopoly, was a highly profitable company. Colloquially ... Read Full Answer >>
  6. What are the differences between affiliate, associate and subsidiary companies?

    All three of these terms refer to the degree of ownership that a parent company holds in another company. In most cases, ... Read Full Answer >>
Related Articles
  1. Personal Finance

    Go Green With Socially Responsible Investing

    Find out how morals and ethics can bring you a surprising return.
  2. Options & Futures

    Extreme Socially Responsible Investing

    Make your money work for you without putting it into ventures that don't support your values.
  3. Economics

    Protest Divestment And The End Of Apartheid

    Can selling stock really change the world? If you sell enough of it, it can.
  4. Economics

    Understanding Green Field Investments

    A green field investment refers to a company, usually a large multi-national corporation, building a new facility in a foreign country.
  5. Economics

    What is a Spinoff?

    Businesses wishing to streamline their operations often sell less productive or unrelated subsidiary businesses as spinoffs.
  6. Investing

    What's a Divestiture?

    Divestiture is when a company, government or other organization sells, shuts down or otherwise eliminates a division or operating unit. Divestitures happen for many reasons. Management may decide ...
  7. Trading Strategies

    General Electric: Good News/Bad News

    General Electric is generous to its shareholders, but that's not the only factor to consider.
  8. Stock Analysis

    A United Technologies Product: Always Closeby

    If you flown in an airplane, shopped for food or sat comfortably in a hot climate, you've probably used a United Technologies product.
  9. Stock Analysis

    How Warren Buffett made Berkshire Hathaway a World-beater

    It would almost be easier to list the industry sectors in which Omaha-based Berkshire Hathaway Inc. (NYSE:BRK.A) doesn’t turn gargantuan profits.
  10. Fundamental Analysis

    Understanding Leveraged Buyouts

    LBOs are often presented as predatory by the media, but it really depends on which side of the deal you're on.

You May Also Like

Hot Definitions
  1. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  2. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  3. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  4. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  5. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
Trading Center