What is the term for a firm selling one or more of its businesses?

The correct term for a firm selling one or more of its businesses is divestiture. This process involves the firm deciding to shed a part of its operations, which can include selling off subsidiary companies, product lines, or assets that are no longer deemed valuable or aligned with the company’s strategic goals. The rationale behind a divestiture may include focusing on core competencies, raising capital, improving overall financial performance, or responding to changes in the market environment.

In contrast, a merger refers to the combination of two companies into a single entity, which does not involve selling off parts of a business. An acquisition involves one company taking control over another company, typically by purchasing a majority stake in it, rather than selling off parts of an organization. Diversification pertains to a strategy where a company expands into new markets or product lines, often to spread risk or increase revenue, but it does not involve the sale of existing business segments. Thus, divestiture accurately captures the action of selling a business within the context of corporate strategy.