divestiture

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The breakup of AT&T (American Telephone & Telegraph Corporation), the largest company in the U.S. prior to 1984. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). Bell Labs was renamed AT&T Bell Labs, and its Western Electric manufacturing division became AT&T Technologies.

The demarcation point of the split was the Class 4 switching center. Except for those that handled large metropolitan regions, all Class 4 offices remained with AT&T, and all Class 5 offices went to the RBOCs. It was the switching office class hierarchy within the Bell system that made Divestiture possible, because there were clear borders between long distance and local service. See Class 4 switch, Bellcore and Trivestiture.

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Sale of an asset to achieve a desired objective. A bank may sell branch offices, or even an entire operating division, to cut operating expenses or carry out its business plan for long-term growth. In a merger with another bank, it may be required to sell branches to gain the approval of state or federal banking supervisors. Assets sold without recourse are taken off the selling bank's balance sheet and transferred to the purchaser. In accounting terms, the sale is treated as a nonrecurring gain (or loss). See also Antitrust Laws; Asset Sales.

noun

The condition of being deprived of what one once had or ought to have: deprival, deprivation, dispossession, loss, privation. See give/take/reciprocity, rich/poor.

A remedy, by virtue of which the court orders the offending party to rid itself of property or assets before the party would normally have done so. Divestiture, like restitution, has the purpose of depriving a defendant of the gains of his wrongful conduct, 91 F. Supp. 333, and is commonly used to enforce antitrust laws.
A court will not invoke this extreme remedy unless it finds divestiture to be both necessary and practicable in preventing a monopoly or restraint of trade.

(deye-ves-tuh-chuhr, deye-ves-tuh-choor)

The act of a corporation or conglomerate in getting rid of a subsidiary company or division. In a tactic to pressure South Africa to end apartheid, during the 1980s many Americans and Europeans urged divestiture on corporations doing business in South Africa.

The partial or full disposal of an investment or asset through sale, exchange, closure or bankruptcy. Divestiture can be done slowly and systematically over a long period of time, or in large lots over a short time period.
 

Investopedia Says:
For a business, divestiture is the removal of assets from the books. Businesses divest by the selling of ownership stakes, the closure of subsidiaries, the bankruptcy of divisions, and so on.

In personal finance, investors selling shares of a business can be said to be divesting their interests in the company being sold. 

Related Links:
Knowing whether to sell or to hold is tough. And no rule fits all. Find out what to consider. The Art Of Selling A Losing Position
Be a savvy investor - learn how corporate actions affect you as a shareholder. What Are Corporate Actions?

For a list of words related to divestiture, see:

• Corporations and Business Practices - divestiture: sale or dissolution of subsidiary business or investment

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See words rhyming with "divestiture."