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what is a divestiture? What are some reasons for divestiture?

what is a divestiture? What are some reasons for divestiture?

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A divestiture is also called 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.its means to take back the investments from subsidiary. it may or may not be compulsory e.g government policies.

Reasons to Divestiture

Divest to Obtain Funds is one of the reason. some times a company needs the funds so they go for divest.
Focusing on Primary Business is also the reason for divestiture.

Prevention of Monopoly is one the reason which is gernally adopted by the Govt.

some times there are Availability of Other Investment Opportunities which are more profitable.

Inability to Achieve Synergy with the present investment leads to divestiture.

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