WHY MANAGERS DIVEST - EVIDENCE FROM NEW-ZEALAND LARGEST COMPANIES

Chief Executives from New Zealand's largest companies were surveyed to distinguish &vesting and nondivesting companies, and to identify the relative importance of the factors and motives which led to the &vestm ent of 208 business units in the period 1985 through 1990. The &vestin g companies were considerably larger and faster growing than nondivest ors. The typical divestment was motivated by the need to convert unatt ractive assets into liquid form which could then be held to strengthen the balance sheet, or reinvested in either the core business or new a reas.