A Comprehensive Review of Corporate Divestitures: Concepts, Motivations, Performance, and Value Creation

Abstract

This article presents a comprehensive review of the existing literature on corporate divestitures, a significant strategy within inorganic growth and corporate restructuring. Drawing on numerous published works, including journal articles, books, and reports, the review aims to enhance conceptual understanding, evaluate the need for further study, and identify research gaps in this field. The literature is systematically categorized into four key segments: divestitures - overview, reasons for divestitures, divestiture performance, and value creation through divestitures. The review highlights various aspects of divestitures, from their historical development and procedural elements to their impact on organizational design, financial performance, and shareholder wealth. Studies across diverse geographical contexts, including India, China, Singapore, the US, UK, Germany, Sweden, and Malaysia, are synthesized to provide insights into the multifaceted nature and outcomes of divestiture strategies.