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The removal of assets from a person or firm's balance sheet through sale, exchange, closure, bankruptcy, or some other means. Divestiture may occur when a person or company has acquired more than he/she/it can properly administer. This sort of divestiture may occur slowly; for example, a corporation may slowly sell subsidiaries to concentrate exclusively on its core competence. On the other hand, divestiture may occur because a person or company has become cash poor and needs to build liquidity very quickly.
The sale, liquidation, or spinoff of a division or subsidiary. For example, a firm may decide to divest itself of a division in order to concentrate its managerial efforts on more promising segments of its business.