Company X sells some of its subsidiary business units to Company Z.Which term describes this business transaction?

Question

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Divestiture is the process of selling an asset or a business unit. In this scenario, Company X is selling some of its subsidiary business units to Company Z, which describes divestiture. A is incorrect, as litigation refers to a legal dispute. B is incorrect as a merger is a combination of two companies to form a new entity. D is incorrect as an acquisition is the process of acquiring or obtaining ownership of a company or asset.

Company X Sells Some of Its Subsidiary Business Units to Company