divestiture

noun di·ves·ti·ture \ dī-ˈves-tə-ˌchu̇r , -chər , də- , chiefly Southern -t(y)u̇(ə)r \
Updated on: 13 Oct 2017

Definition of divestiture

1 :the act of divesting
2 :the compulsory transfer of title or disposal of interests (such as stock in a corporation) upon government order

Examples of divestiture in a Sentence

  1. Divestitures are used to break up monopolies.

  2. Before divestiture, the telephone company monopolized the state.

Recent Examples of divestiture from the Web

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'divestiture.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

Origin and Etymology of divestiture

divest + -iture (as in investiture)


Financial Definition of DIVESTITURE

divestiture

What It Is

A divestiture or divestment is the reduction of an asset or business through sale, liquidation, exchange, closure, or any other means for financial or ethical reasons. It is the opposite of investment.

How It Works

Let's assume Company XYZ is the parent of a food company, a car company, and a clothing company. If for some reason Company XYZ wants out of the car business, it might divest the business by selling it to another company, exchanging it for another asset, or closing down the car company.

Why It Matters

Optimists often look at divestitures as ways to streamline (i.e., "get back to basics"), reduce debt, and enhance shareholder value. Pessimists may view them as concessions that the divested assets were not performing well.


DIVESTITURE Defined for English Language Learners

divestiture

noun

Definition of divestiture for English Language Learners

  • finance : the act of selling stock, property, etc., because of a government order


Law Dictionary

divestiture

noun di·ves·ti·ture \ dī-ˈves-ti-ˌchu̇r, də-, -chər \

legal Definition of divestiture

1 :the sale or transfer of title to a property (as an operating division) under court order (as in bankruptcy)
2 :the sale of an asset (as a business division) that is unprofitable, does not enhance a corporate restructuring, or is felt to be morally reprehensible

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