Renationalization

AAA

DEFINITION of 'Renationalization'

Bringing assets and/or industries back into national-government ownership after they had previously been privatized. The motives for renationalization can be widely varied, but are always based in either economics or politics.

Renationalization often occurs in sectors that are required for the country to operate smoothly, or where monopolies must occur. Examples of sectors that are commonly renationalized are utilities and transportation.

If no compensation is given to the previous owners, this process is called expropriation, and it is commonly seen in times of war.

INVESTOPEDIA EXPLAINS 'Renationalization'

Renationalization can be a risk investors see when investing in a foreign industry of a developing country. Developing countries might begin to privatize industries and assets previously under national control and allow foreign investment for the first time. Should the privatization not work, or should political instability prevail, renationalization could occur. In such a case, the largest risk would be that no compensation is given to the previous owners (i.e., shareholders).

RELATED TERMS
  1. Nationalization

    Refers to the process of a government taking control of a company ...
  2. Crown Corporation

    Any corporation that is established and regulated by a country's ...
  3. Government Purchases

    Expenditures made in the private sector by all levels of government, ...
  4. Quasi-Public Corporation

    A type of corporation in the private sector that is backed by ...
  5. Legal Monopoly

    A company that is operating as a monopoly under a government ...
  6. Private Company

    A company whose ownership is private. As a result, it does not ...
Related Articles
  1. Investing Basics

    Broadening Your Portfolio's Borders

    Find out what type of international fund might suit your needs in gaining exposure to foreign markets.
  2. Investing Basics

    Why Country Funds Are So Risky

    High returns come at a price, but country funds may still be a good bet.
  3. Mutual Funds & ETFs

    Build Your Portfolio With Infrastructure Investments

    Mutual funds devoted to keeping roads, structures and communities safe can make you money.
  4. Investing

    How does privatization affect a company's shareholders?

    The most recognized transition between the private and public markets is an initial public offering (IPO). Through an IPO, a private company "goes public" by issuing shares, which transfer a ...
  5. Investing

    If I reject the tender offer for acquisition of the stock that I own in a company and the company goes ...

    Since the passing of the Sarbanes-Oxley Act, a significant number of public companies have chosen to go private. The reasons why companies make this choice are as varied as the companies themselves, ...
  6. Investing

    What is political risk and what can a multinational company do to minimize exposure?

    For multinational companies, political risk refers to the risk that a host country will make political decisions that will prove to have adverse effects on the multinational's profits and/or ...
  7. Options & Futures

    What risks do organizations face when engaging in international finance activities?

    When an organization decides to engage in international financing activities, they also take on additional risk as well as opportunities. The main risks that are associated with businesses engaging ...
  8. Retirement

    Risk And Diversification

    Safeguarding your portfolio involves a few simple steps.
  9. Economics

    What Is Happening To The BRIC Economies?

    Ten years ago, it was about the BRIC countries –Brazil, Russia, India, and China, and it was thought that capitalizing their resources would elevate them.
  10. Economics

    The Economic and Social Effects of Corruption

    Corruption results in inefficiencies in the operations of emerging economies, and prevents such economies from reaching the maximum level of development.

You May Also Like

Hot Definitions
  1. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  2. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  3. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  4. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  5. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  6. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
Trading Center