Definition
Strategic Sale
A strategic sale is disinvestment in which the government sells a controlling stake in a public sector firm together with management control to a private buyer.
Unlike minority stake sales that only raise money, a strategic sale transfers both ownership and management of a public sector enterprise to a private acquirer — effectively privatisation. High-profile examples in India have involved national carriers and state-owned manufacturers being handed to private groups.
Strategic sales are politically sensitive and operationally complex, often involving carving out land, liabilities and employee issues before a bidder is found. The government's stated policy is to retain a bare-minimum presence in strategic sectors and exit non-strategic businesses through such sales.
Related terms
- DisinvestmentDisinvestment is the sale by the government of part or all of its stake in a public sector enterprise to raise resources or improve efficiency.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.