A holding company is a company that owns other companies’ outstanding stock. A holding company usually does not produce goods or services itself; rather, its purpose is to own shares of other companies to form a corporate group. Holding companies allow the reduction of risk for the owners and can allow the ownership and control of a number of different companies.
In the United States, 80% of stock, in voting and value, must be owned before tax consolidation benefits such as tax-free dividends can be claimed. That is, if Company A owns 80% or more of the stock of Company B, Company A will not pay taxes on dividends paid by Company B to its stockholders, as the payment of dividends from B to A is essentially transferring cash from one company to the other. Any other shareholders of Company B will pay the usual taxes on dividends, as they are legitimate and ordinary dividends to these shareholders.
Sometimes a company intended to be a pure holding company identifies itself as such by adding “Holding” or “Holdings” to its name.
The Coca-Cola Company:
The company has a long history of acquisitions. Coca-Cola acquired Minute Maid in 1960, the Indian cola brand Thums Up in 1993, and Barq’s in 1995. In 2001, it acquired the Odwalla brand of fruit juices, smoothies, and bars for $181 million. In 2007, it acquired Fuze Beverage from founder Lance Collins and Castanea Partners for an estimated $250 million. The company’s 2009 bid to buy a Chinese juice maker ended when China rejected its $2.4 billion bid for the Huiyuan Juice Group, on the grounds the resulting company would be a virtual monopoly. Nationalism was also thought to be a reason for aborting the deal. In 1982, Coca-Cola purchased Columbia Pictures for $692 million. It sold the movie studio to Sony, for $3 billion, in 1989. In 2013, Coca-Cola finalized its purchase of ZICO, a coconut water company. In 2011, the Coca-Cola company bought the rest of the organic tea company Honest Tea, after buying a 40% stake in the company in 2008. In 2015, the company took a minority stake ownership in the cold pressed juice manufacturer, Suja Life LLC.
Sphere 3D Corp:
Sphere 3D Corp which is led by the President Peter Tassiopoulos is a holding company with great significance in Canadian region. The Management and founders are significant shareholders of Sphere, and will remain to be after the combination. We’ll probably be somewhere around 20% once the transaction is complete. Cyrus Capital will also be around 20% of the combined company, Pinetree Capital and its affiliates will be around 10, and there’s a few other institutions including Marathon who is a large shareholder of Overland, with collectively with others will be around 15% on completion. So we’ve got about 65% held between founders and institutions when this is all said and done.
These are some of the well-known holding companies in the Globe with a good command over the market in many terms. If you would like to hear more from us we are happy to share relevant information about the same.