What does divested mean in legal terms?

What does divested mean in legal terms?

In business law, divestment is when a business sells off its subsidiaries, investments, or other assets for a financial, ethical, or political objective. To do so, the business must partially or fully remove the asset from its financial records (books). Businesses can divest through sale, closure, or bankruptcy.

What does divested mean in business?

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.

What did divest mean?

Definition of divest of 1 : to take (something) away from (someone or something else) : to cause (someone or something) to lose or give up (something) The document does not divest her of her right to use the property. —often used as (be) divested of He was divested of his title/power/dignity.

What is an example of divestment?

Examples of divestitures include selling intellectual property rights, corporate acquisitions and mergers, and court-ordered divestments.

Is divest the opposite of Invest?

Also known as divestiture, divestment is effectively the opposite of an investment and is usually done when that subsidiary asset or division is not performing up to expectations. In some cases, however, a company may be forced to sell assets as the result of legal or regulatory action.

Why would a company divest?

Through divestiture, a company can eliminate redundancies, improve operational efficiency, and reduce costs. Reasons why companies divest part of their business include bankruptcy, restructuring, to raise cash, or reduce debt.

What are the reasons for divestment?

Reasons for Divestment

• Source of funds. In times of financial difficulty and to keep the business afloat, businesses sell off their non-core assets.
• Focus on primary business.
• Prevention of monopoly.
• Better investment opportunities.
• Social or political reasons.

Why is divestment important?

A divestiture is an important means of creating value for companies in the mergers, acquisitions, and the consolidation process. Through divestiture, a company can eliminate redundancies, improve operational efficiency, and reduce costs.

Is divestment good for shareholders?

Analysis by Deloitte indicates that divestments can create greater shareholder returns. While the share price of both sellers and buyers tends to outperform their relative index, there is a thin line between success and failure.

What are the advantages and disadvantages of divestment?

Definition of Business Divestitures. When referring to corporations, a divestiture involves the sale, spinoff or shutdown of a business unit, division or subsidiary.

What is the opposite word for divest?

What is the opposite of divest?

Does divestment actually work?

Equity divestment can also backfire. By thinning out the ranks of shareholders who might pressure boards, divestment concentrates ownership among those “who are at best agnostic about climate impacts,” said Edward Sun, a portfolio manager of Engine No. 1. That means less likelihood of pro-climate shareholder activism.