Definition

A reduction in capital investment. 

1. The action of an organization or government selling or 
liquidating an asset or subsidiary. Also known 
as "divestiture". 

2. A reduction in capital expenditure, or the decision of a 
company not to replenish depleted capital goods. 

1. A company or government organization will divest an 
asset or subsidiary as a strategic move for the company, 
planning to put the proceeds from the divestiture to better 
use that garners a higher return on investment. 

2. A company will likely not replace capital goods or 
continue to invest in certain assets unless it feels it is 
receiving a return that justifies the investment. If there 
is a better place to invest, they may deplete certain 
capital goods and invest in other more profitable assets. 

Alternatively a company may have to divest unwillingly if 
it needs cash to sustain operations.