What is Divestment? 💸§
Imagine you have a collection of baseball cards that aren’t doing anything productive except gathering dust in your attic. One day, you realize you can make some good money by selling these cards. Cha-ching! That’s basically divestment: the act of realizing the value of an asset by selling or exchanging it. It’s like breaking open a piggy bank, but significantly more grown-up and complicated.
The Business End (Literally) 🏢§
In the business world, divestment might sound like a company just decided to Marie Kondo its way to happiness by getting rid of the parts that don’t bring ‘joy.’ More formally, it’s about selling or closing down portions of a company’s operations. Sound strategic? It usually is!
Here’s a Sneaky Formula for You 😏§
Divestment = Sell or Shut Down
Easy peasy, right?
Why Divest? 🤔§
Good question! Businesses don’t practice divestment just to stay spry. They do it to focus on their core activities, raise cash, or even to comply with regulatory requirements. Let’s put this in a mermaid context!
Real-World Examples 🏦§
Nestlé: Sold its U.S. confectionery business to Ferrero Rocher in 2018. 🍫
Unilever: Sold off its spreads business, including brands like Flora and Promise, to KKR in 2017. 🧈
The Fun Side of Divesting 🎉§
- Travel Light: Companies get rid of non-core assets and travel lighter.
- Show Me the Money!: The cash from selling can be used for more profitable ventures.
- Escape Plan: If things aren’t going well, closing an unprofitable segment can save a lot of grief.
Quiz Time 🧠§
Test your new-found divestment knowledge!
