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. Private Company

    A company whose ownership is private. As a result, it does not ...
  4. Government Purchases

    Expenditures made in the private sector by all levels of government, ...
  5. Legal Monopoly

    A company that is operating as a monopoly under a government ...
  6. Quasi-Public Corporation

    A type of corporation in the private sector that is backed by ...
Related Articles
  1. Broadening Your Portfolio's Borders
    Investing Basics

    Broadening Your Portfolio's Borders

  2. Why Country Funds Are So Risky
    Investing Basics

    Why Country Funds Are So Risky

  3. Build Your Portfolio With Infrastructure ...
    Mutual Funds & ETFs

    Build Your Portfolio With Infrastructure ...

  4. What risks do organizations face when ...
    Options & Futures

    What risks do organizations face when ...

Hot Definitions
  1. Return On Sales - ROS

    A ratio widely used to evaluate a company's operational efficiency. ROS is also known as a firm's "operating profit margin". ...
  2. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  3. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  4. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  5. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  6. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
Trading Center