What is the definition of divestiture?

Divestiture is defined as the sale or disposition of non-core assets. This process typically occurs when a company decides to sell off parts of its operations or assets that are not central to its primary business strategy or objectives. By divesting non-core assets, a company aims to improve its operational efficiency, focus on its core competencies, enhance its financial position, or raise capital for reinvestment in more strategic areas aligned with its long-term goals. This strategic decision may be motivated by the desire to streamline operations, reduce debt, or respond to changing market conditions.

The other options represent different business activities that do not align with the definition of divestiture. Acquiring new business assets pertains to expansion rather than divestiture, while investing in innovative technologies relates to growth and development rather than the sale or disposal of assets. Financial restructuring focuses on reorganizing a company’s financial framework, which is distinct from the asset disposition associated with divestiture.