Recent Examples of holding company from the Web
The holding company controlled by the Porsche and Piech billionaire family embarked on its first takeover in June with the acquisition of a German software maker after struggling for years to complete a significant transaction.
Under the reorganization plan, the holding company owns 55% of FFBW Inc. stock.
Some Spider is a holding company, and Vinit always imagined that Cafe would be the first of many media properties.
One directive called on the Office of Federal Student Aid to hold companies accountable for borrowers receiving accurate, consistent and timely information about their debt.
Today's lawsuit is the second time that a patent-holding company has teamed up with a Native American tribe to sue a technology company.
Kim serves as president and CEO of the holding company that owns both teams and other sports/entertainment assets.
Tidal holding company Aspiro reported a $28 million loss in 2015, and rumors have long swirled that it could be purchased by a bigger company like Apple.
Most recent legislative attempts to protect data have been aimed at requiring to notify people when there’s been a security breach and holding companies to account for the financial consequences of any breaches.
These example sentences are selected automatically from various online news sources to reflect current usage of the word 'holding company.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
First Known Use of holding company
Financial Definition of HOLDING COMPANY
What It Is
A holding company owns controlling interest in another company or owns enough stock to control the company's management and operations. Different legal jurisdictions have different rules about what technically constitutes a holding company.
How It Works
Let's say Company ABC is raising capital and agrees to sell 55% of its shares to Company XYZ in return for $1 billion in cash and debt. Company XYZ and Company ABC remain separate entities and have separate management teams, but because Company XYZ owns 55% of Company ABC's shares, it can vote however it likes and essentially override the wishes of the rest of the shareholders. Accordingly, it has tremendous control over who is elected to the board and who the board employs to run the company, as well as whether and how the company raises more capital or changes operational direction.
Why It Matters
Holding companies often consist of a parent and several subsidiaries. In some cases, holding companies are attempting to monopolize a particular market. They do this via horizontal integration, whereby the holding company purchases a number of competitors, or via vertical integration, whereby the holding company purchases businesses in each stage of a product's lifecycle (that is, it buys suppliers, distributors, wholesalers and retailers of the product).
In most cases, each subsidiary of a holding company operates independently of the holding company's other businesses (although the managers of the subsidiaries work for the managers at the holding company).
One advantage of holding companies is that they are typically very diversified businesses (although some stick to one or two industries). This diversification and the efficiencies brought about by shared or reduced costs often make holding companies less risky businesses than those operating in a single market or niche.
However, holding companies face the real challenge of becoming so big that they are difficult to manage efficiently. They also often fail to realize the anticipated cost savings with each acquisition. This can lead to a lack of focus, which exacerbates the managerial problem and reduces shareholder returns. This in turn is why holding companies often "spin off" subsidiaries into stand-alone entities.
HOLDING COMPANY Defined for English Language Learners
Definition of holding company for English Language Learners
business : a company whose main business is owning more than half of another company's stock
Learn More about holding company
Britannica.com: Encyclopedia article about holding company
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