Divestment is a company's decision to increase the important value of the company's assets, which aims to increase the company's power in changing the asset structure and allocation of resources. Divestment which is targeted to increase the value of the company so that it sells its business unit is certainly different from other business strategies such as Mergers and Acquisitions. Mergers and acquisitions have an impact on the size of the company, so divestment will result in a smaller company size due to the separation or sale of some business units (Flickinger, 2009).
The difference between divestment and acquisition is very significant. The differences have an impact on important aspects of the divestment process. The differences in the process are: the psychology of the transaction, the need for intense planning and rapid implementation of the separation of the organization from the entity being sold, the need for preparation and staging of the transaction, or the presence of substantial communication and management challenges (Gole & Hilger, 2008).
Divestment also requires preparation, namely building capacity, forming a team during the divestment process, requiring advisors, and other resources. In addition, several factors affect it, namely low labor productivity, liquidity disorders, too much debt, inefficient production processes which result in low product quality, inexperienced sales force, unfavorable macroeconomic and social conditions, changes in consumer tastes, strong competitor threats, and the emergence of new entrants to the industry thus limiting the company's space to compete  (Moin, 2004).
The main measure of success for the seller is to close the transaction at a price that includes a premium over the retention value of the property. To achieve the above potential, it is presented to the market on a risk-free basis in a credible manner as reserve calculations are interpretive and the buyer takes the asset's risk differently. In general, an aggressive interpretation of the data shows that sales get a good deal (Haag, 2005).
Divestment which is believed to be a company's business strategy is considered to be healthy for the company if the sale gets a fairly high offer price. It requires a series of preparations for the company's management. Preparation for this divestment has several steps, namely building capabilities, forming a team during the divestment process, requiring advisors, and resources from other companies (Frankel & Forman, 2017).
Divestment as one of the company's business strategies can actively take steps to better position itself to achieve its goals. Thus, the criteria for the divestment decision depend on the specific business situation, goals, and strategy of the company (Sewing, 2010). This particular business situation can be interpreted as a divestment motive. The divestment motive has several reasons, including geographic location which is no longer attractive, assets held against its financial metrics that are undervalued (high lifting costs or low-profit margins), properties for sale that no longer fit into the company's portfolio, scheduled capital expenditures that do not have the desired profitability, and reserve recovery that is in jeopardy (Haag, 2005).
Regarding the divestment motive, Salim distinguishes it into two types of divestment motives, namely voluntary divestment, and involuntary divestment. Voluntary divestment can be used as a way to return or save investment, while voluntary divestment can be carried out by private legal entities, such as Limited Liability Companies, Firms, and Limited Liability Companies but can also be carried out by public legal entities such as the State, for example, the Indonesian Government divests shares of State-Owned Enterprises to a Singapore legal entity, namely Singapore Technology Private Ltd. The State-Owned Enterprise is Indosat, which was considered by the Government to cover the needs of the 2002 State Budget, which had experienced a deficit in 2002 (HS & Nurbani, 2013).
In addition to voluntary divestment, there is also involuntary divestment. The reason for this involuntary divestment is because there is coercion on companies caused by the existence of laws and regulations, such as companies in the United States, namely American Telephone & Telegraph (AT&T) and Microsoft which were once considered monopolies and had to be split into two companies so that there was no unfair competition (Moin, 2004). The divestment that took place in the State of Sudan aims to authorize the State and Local Governments to dispose of assets in companies conducting business operations in Sudan. It is set in Point b, sec. 3., Sudan Accountability and Divestment Act of 2007.
The divestment in America against AT&T and the divestment in Sudan were carried out by state-owned companies. This case can be called privatization. This is different from what happened in Indonesia in the mineral and coal mining sector. The companies PT Newmont Nusa Tenggara and PT Kaltim Prima Coal had disputes at the UNCITRAL International Arbitration Institute (United Nations Commission on International Trade Law) Batubara & Purba (2013) proposed, and ICSID (The International Center For Settlement of Investment Disputes) in divesting their shares to the Regional Government of East Kalimantan and the Government of Indonesia (International Centre for Settlement of Investment Disputes Washington, D.C. in the proceeding between government of the Province of East Kalimantan (Claimant) v. PT Kaltim Prima Coal Rio Tinto plc bp p.l.c. pacific resources investments limited bp interna, 2009).
The description above leads to a question about how to nationalize foreign shares in Indonesia by divestment. The background of involuntary divestments caused by the laws and regulations that occurred in the United States and Sudan can be considered privatization because of selling or reducing state-owned companies. On the other hand, the divestment that occurred in the mineral and coal mining sector in Indonesia was nationalized because of the companies that divest their shares to the Indonesian side.
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