In finance and economics, divestment or divestiture is the reduction of some kind of asset for financial, ethical, or political objectives or sale of an existing business by a firm. A divestment is the opposite of an investment.

What does divestiture mean in business?

In finance, divestment or divestiture is defined as disposing of an asset through sale, exchange, or closure. A divestiture is an important means of creating value for companies in the mergers, acquisitions, and the consolidation process.

What is meant by the term divestiture?

A divestiture is the partial or full disposal of a business unit through sale, exchange, closure, or bankruptcy. A divestiture most commonly results from a management decision to cease operating a business unit because it is not part of a company's core competency.