Learn English – difference between the words “divestment” and “divestiture”

differencesmeaningword-choice

Is there a difference between these two terms, either in terms of definition or connotation? Context is in a business selling an asset or business line. Most of the time I hear divestment, but once in a while someone refers to a divestiture.

EDIT:

When you look it up, (e.g., http://en.wikipedia.org/wiki/Divestment), it just says they're the same word. I'm looking for more than a simple Google search would provide.

EDIT 2:

Investopedia says the same thing, that they're the same: http://www.investopedia.com/terms/d/divestment.asp

Perhaps this means that they are the exact same, but I feel a slightly different connotation between the two that I can't put my finger on.

Best Answer

Business Dictionary has subtly different definitions:

divestment

  1. Realizing the market value of an asset by selling, liquidating, or exchanging it. Opposite of investment.
  2. Sale of all or majority of voting stock (voting shares) of a firm.

divestiture

Selling of, or otherwise disposal of, a firm's assets to achieve a desired objective, such as greater liquidity or reduced debt burden. In accounting, divestiture transactions are recorded as a one time, non-recurring gain or loss.

If you sell an asset such as stock in another firm to realise that investment, that's a divestment of that asset.

A firm can divest itself of its own assets to raise funds for the firm, and this is divestiture. While stock in other companies might be an asset, I'd take divestiture to refer to fixed assets, and use divestment for more liquid assets or short-term investments.

But the meanings are so close as to be functionally identical.

Related Topic