Definition for : Asset intensive

An "asset intensive" industry is an industry which requires above-average levels of capital in order to operate. This alone creates substantial Barriers to entry for other incumbent players trying to enter this particular industry. Such is the case in the utility sector (E.g. power generation, water treatment, ....), as well as the infrastructure sector (E.g. motorways, airports... the acquirer of a company seeks to break down the company in parts and sell those to third parties, hoping that the sum of the parts will at the end of the process be larger than the price they initially paid for the overall company.

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