Definition
A crown jewel defense is a defensive maneuver where the target sells (or commits to sell) its most valuable business segment — its “crown jewels” — to make itself less attractive to the hostile bidder.
Why it works
If the bidder wanted the target primarily for that asset, removing it eliminates the strategic rationale. Often paired with a lock-up giving a friendly third party a right to buy the asset on favorable terms triggered by a change-in-control attempt.
Modern relevance
Largely out of favor in the U.S. — Delaware courts (Revlon and progeny) treat crown jewel sales as a sale-of-control trigger that requires the board to maximize price across all alternatives. Aggressive crown jewel defenses are vulnerable to fiduciary-duty challenges.