Disinvestment is the sale or disposal of an asset. This step may be taken for many reasons, including the following:
- To improve the return on assets by shrinking the total asset base of the entity
- To raise cash from the sale of assets
- To create more floor space, which can be reallocated or used as part of an overall reduction of floor space
- To eliminate an asset that has an associated legal or risk liability
- To concentrate management attention on a reduced number of product lines
Disinvestment may be accomplished by selling, scrapping, donating, or spinning off an asset. In the last case, a business may spin off a subsidiary or group of assets to shareholders.