The divestiture of assets is not always a sign of business failure; rather, it more often represents a rational choice in a company's development strategy. It falls under the category of external transaction-based strategies and is a contraction strategy that corresponds to expansion strategies. By divesting production lines, business units, movable and immovable property, fixed assets, intangible assets, labor force, or even branches and wholly-owned subsidiaries that are unsuitable for its long-term strategy, lack growth potential, or negatively impact the development of core businesses, a company can optimize resource allocation efficiency, enhance its core competitiveness, and increase its value in the capital market.
Asset divestiture, as part of a company’s strategic capital...