👉 Background: Aristocrat Leisure is Australia's largest gambling machine manufacturer that started back in 1953. While it has been traditionally known for its old-school slot machines, it went on an acquisition spree in 2017 by acquiring two game developers, Plarium and Big Fish Games for more than $1 billion USD.

👉 What happened: Now, it’s easy come, easy go because Aristocrat is selling Plarium for $620 million USD upfront, with the potential for another $200 million USD if Plarium hits certain financial targets over the next three years.

👉 What else: Aristocrat has decided to sell Plarium because it plans to shift its focus back towards real-money gaming markets, rather than mobile gaming. And Aristocrat's move shows that it ain't afraid of a strategic divestment.

What's the key learning?

💡A strategic divestment is where a company decides to cut loose what no longer aligns with its long-term goals or vision.

💡The idea is that once you’ve divested from non-strategic assets, you can reinvest in assets that are aligned with the company’s core offering.

💡For example, just earlier this year, Treasury Wine Estates announced plans to sell its cheaper wine brands like Wolf Blass and Yellowglen. Similar to Aristocrat, these are much lower-margin products compared to Penfolds. So it's out with the non-core and in with the premium wines and pokies.