Minority disinvestment

What is minority disinvestment?

A majority shareholder selling their shares to a minority shareholder or group of shareholders is referred to as a minority disinvestment. 

This kind of disinvestment may take place for a number of reasons, including the majority shareholder's need for capital, a desire to lessen risk exposure, or the need to satisfy regulatory requirements.

Minority disinvestment often entails the selling of a stake in the business owned by the majority shareholder, which could be a controlling position or a smaller one. The minority shareholders who buy the shares might have more sway within the corporation, but they normally have little influence over management or decision-making.

In some cases, minority disinvestment may also refer to a government's sale of a portion of its ownership stake in a state-owned company to private investors or the public. This is often done to promote privatization and improve the efficiency and profitability of the company.