The Company Has Some Motive for Divestment
The company has some motive for divestment.
First, a company will divest (sell) a business that is not part of the main operational area so that it can focus on business areas can best do. For example, Eastman Kodak, Ford Motor Company, and many other companies have been selling a wide array of businesses that are not closely related to its core business.
The second motive for divestment is to gain an advantage. Divestment result in better profits for the company because it is an attempt to sell the business in order to earn money. For example, CSX Corporation divest to focus on its core business is the construction of the railway as well as aiming to make profits so that it can pay its debts at the moment.
The third motive for divestment is sometimes believed that the value of companies that have done it (selling a particular business them) is higher than the value of the company prior to divest. In other words, the amount of the value of the asset liquidation of the company exceeds the value of the private market when compared to the company at the time prior to divest. This strengthens the company’s desire to sell what it should be worth rewarding than terlikuidasi at the time before the divestment.
The fourth motive for divestment is a business unit is not profitable anymore. The business units that run away from the core competence of the company, then it is likely to fail in its operation.
[edit] Divestment method
Some companies use technology to facilitate the process of divesting a number of divisions. They publish information about divisions anywhere they want to sell on their official site so it can be seen by other companies who were interested in purchasing Division. For example, Alcoa has established an online showroom featuring the Division they are selling. By making online communication, Alcoa has reduced the cost to finance divisions on hotels, transportation, business and Affairs of the meeting.
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Tags: Alcoa, Business, Company, CSX Corporation, Divestment, Eastman Kodak, Ford Motor Company, Iran
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