What is the benefits of divestment, Financial Management

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What is the Benefits of divestment

¸ Releases cash tied up to finance more promising opportunities.

¸ Reduces diversification and complexity of a group in case of a demerger.

¸ could improve financial results for example by sale of a division or product that under achieves.

¸ Exit route for investor's for example MBO/MBI.

¸ Enables management to focus on core competences.

¸  Make  the  organisation  leaner  and  more  cost  efficient 'adding  value' to  shareholders, stronger financial performance also can avoid a low share price making the organisation less prone to takeover by predator companies.

 


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