What is a divestiture?

Divestitures involve the sale, closure or exchange of a business unit or portion of the business. Spin-offs often focus on separating business units with high growth potential. Divestitures help a company focus on its core business or expertise.

Divestitures can occur after a merger or acquisition. This allows a company to eliminate parts of the business that do not fit its strategic interests. Divestitures can be advantageous for reducing costs, generating capital and increasing strategic focus.

Divestiture is the act of shedding certain business interests. For example, General Electric shed its pharmaceutical business in 2020. Similarly, WeWork shed its software interests and refocused solely on its workspace-sharing business. For support and additional information, explore our Capital Markets solutions.