What are some types of divestitures?

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What are some types of divestitures?

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What are some types of divestitures?

Explanation & AnswerSolution by a verified expert

Explanation

The four types of divestitures are as follows:

Sale of assets to another company- Here, an entire division or unit of a company is sold for cash or shares.
Liquidation- Here, the assets of a division are sold individually rather than being sold as a whole.
Spin-off- In a spin-off, the divested division forms a new entity and the existing shareholders are given new stock in the new entity.
Equity carve-out: The parent company gains new equity financing by selling a minority interest to new shareholders and yet retaining control over the subsidiary.

Verified Answer

Following are the types of divestitures:

Sale of assets to another company
Liquidation
Spin off
Equity carve out

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