This chapter explores the inter-relationship between divestment and the Management Buyouts (MBO). Local management is particularly well placed to spot ways of improving performance and thereby raising the potential value of the enterprise. The chapter considers the evolving role of the capital market in facilitating buyouts in general and particularly divestment MBOs. It looks at the development of the study of buyouts before going on to consider their consequences. The chapter also looks in particular at the role of the MBO in corporate refocusing, explores both the pull and push factors that have led so many multiproduct firms to roll back diversification and focuses on their efforts on core activities. Some MBOs display serious weaknesses, especially when credit market conditions worsen leaving indebted businesses in trouble. The chapter reviews the emergence of the freestanding buyout form as an alternative to the division/subsidiary located in a diversified multidivisional form firm.