Companies are called holding corporations. What is a holding? Definition of the concept and its structure

A business enterprise may have different shapes. For example, be a holding company or a corporation. What are these types of enterprises?

Facts about holdings

Holding is a group of commercial firms legally associated with each other. Its structure usually includes a parent company, which owns several subsidiaries. The main organization has controlling blocks of their shares at its disposal. Subsidiaries within the holding can also form their own subordinate structures. In this case, they will be maternal towards them.

Control of the main holding organization over its subsidiaries is often exercised not only in the form of ownership of a controlling stake in their shares, but also in other ways. For example, it may be within the competence of the managers of the parent company to appoint senior management of subordinate structures. In some cases, top managers of a holding are able to take direct part in the management of subsidiaries.

Key management decisions are also made at the level of senior management structures of the group of companies. Top managers of the holding develop a business development strategy that subsidiaries must adhere to.

For the parent company and its subordinate structures, the owners of the holding determine uniform standards of interaction on various issues. In relation to employees of all organizations included in the group of companies, general ethical standards are established, business culture, making joint decisions.

Facts about corporations

The term " corporation" - very capacious. One of its meanings is union commercial organizations in order to jointly solve business problems. Another meaning of the term "corporation" is any commercial enterprise in principle. Both interpretations are common in Russia.

But it is worth noting that the corporation as a form of association of companies at the official level in the Russian Federation is not very developed. Therefore, in practice, the term about which we're talking about, in Russia it is most often used in a different context.

Let us note that state corporations can be officially established in the Russian Federation. But by law they do not have the right to be commercial firms. Therefore, their activities are very far from traditional business corporations. Although it may be associated with making a profit.

Thus, among Russian entrepreneurs, the term “corporation” is used informally in most cases. As a rule, for the purpose of indicating big business with impressive capitalization. Most often - public joint stock companies that can attract investment capital by issuing shares and organizing their sales on the stock exchange.

If we talk about corporations as associations of firms, then they, like a holding company, are characterized by legal dependence. However, the subordination of some firms to others is not so pronounced in them. Each of the companies that make up the corporation, as a rule, builds its own business strategy. But quite regularly there can be a joint discussion of fundamental issues related to business development, coordination of actions in the field of capital management and market development.

The establishment of a parent company in a corporation that owns controlling stakes in subsidiaries, as in a holding company, is a rare phenomenon. Usually, securities in corporations are in free circulation. Although, of course, participants in the relevant associations can make transactions with each other to redistribute shares in shares, which can lead to the concentration of their controlling stakes in the hands of a narrow group of entrepreneurs.

Another feature of corporations is that they are formed, as a rule, by organizations that are represented in different market segments. Sometimes they are completely different. For example, one corporation may have food and heavy industry enterprises.

Comparison

The main difference between a holding and a corporation (if the second term is considered as an association of firms) is that the first is significantly more centralized. As we noted above, a controlling stake in holding companies most often belongs to the parent company. For classical corporations, such a scheme for organizing business management is not typical. Centralization in such structures can only be expressed in the establishment of some general management bodies - such as, for example, a board of directors.

Having found out what the difference is between a holding and a corporation, we will display the criteria we have identified in the table.

Table

Holding	Corporation
What do they have in common?
Both are associations of commercial firms
What is the difference between them?
Centralized, shares of subsidiaries belong to the parent company	Centralization is possible at the level of individual government bodies; shares of companies that are part of the association are freely available for sale
Consists of companies operating, as a rule, in one business segment	Often includes companies from different business segments
A unified business development concept is being built	Each company, as a rule, works according to its own concept of business development

The term " holding" comes from the word "hold" in English language, translated as “hold”, “possess”.

A holding is an association of commercial enterprises, one of which is the main (management, parent) company, the rest are subordinate to it and are called subsidiaries or members of the holding.

A holding company is a type of business that deals specifically with assets, investments and management, rather than providing goods and services, with the aim of making a profit from production and sales. The management company is a joint stock company and its main activities are related to the ownership of assets in another company or in several. Assets can be in the form of shares, intellectual property and real estate.

Holding companies may be responsible for the supervision and management of other companies, in addition to owning shares and receiving dividends from their holdings of securities. In addition to these functions, the parent company does not normally conduct any other type of business activity.

Subsidiaries lead commercial activities independently, but key management issues, for example, the change and appointment of management, are decided by the holding’s shareholders.

The holding manages key issues economic activity of their enterprises by owning the majority of their authorized capital or performing the functions of the main executive body. According to the distribution of shares, the holding company owns a controlling stake, the remaining share is distributed among other enterprises.

It is known that the term “holding” is used in the USA and England; in Germany such enterprises are called concerns, and in France partnerships.

Creation of holding companies

There are two options:

1. Creation of several enterprises with one or various types activities into a single complex that takes them under control. During its activities, one large organization, in our case a holding, can acquire other smaller ones and include them in its structure.
2. The second option was widespread back in the 90s during the transition to market economy, when so-called holding companies were formed as a result of the restructuring of state management structures that were unable to manage controlled companies in the new conditions. In other words, subsidiaries were created by spinning them off from one large enterprise that was subject to privatization.

There are several holding companies in Russia, one of which can be called the Lukoil company, which includes several subsidiaries, different in types of activities, but with one financial purpose. The holding structure also includes acquired oil companies.

Among foreign large organizations can be called Google, known for its large-scale transactions to acquire shares of other core companies.

How are holdings created in Russia nowadays?

It's interesting that in Russian legislation There is no such organizational and legal form as a holding. In the Civil Code, this term is understood in its meaning as an association, association, partnership. Thus, it is impossible to register a company with the designation “holding” in our country. Over the past 5 years, proposals have been regularly made to adopt a law “On Holdings”, but it has not yet been adopted.

The merger of subsidiaries into one management company until 2014 could be carried out in the form of open joint-stock companies; from September 1, 2014, after amendments were made to the Civil Code of the Russian Federation - in the form of public and non-public joint-stock companies.

Main types of holdings

Presented in Russia:

1. Financial, when shares and securities of other enterprises account for more than 50% of the authorized capital of the holding. This means that the holding unites not enterprises, but capital, and on the basis of this does not have the right to any types of activities other than financial ones.
2. Mixed, in other words non-financial. In this case, the holding association can conduct its own business activities, in addition to management third parties. This is more common when production activities on a large scale.

Advantages of business combinations

• Clear distribution of responsibilities. Each company has its own management and area of ​​responsibility.
• Possibility to choose a tax system for each company.
• Competent division of income and expenses, convenient financial control.
• Protection of common property from creditors of any of the companies.

Holdings are formed to conquer the market or reduce costs. The most important task of a holding company is to systematically manage its subsidiaries in order to improve their efficiency and overall profitability.

Holding concept

Basic definitions of the concept of “holding” reflect its fundamental essence, which has a financial, legal, organizational and economic nature. According to the first approach,

is a company that uses its assets to establish control over organizations by purchasing controlling stakes.

In fact, the enterprises that are part of such a holding may be formally or de facto independent. However, the boundaries of independence of enterprises in such a holding are quite narrow.

Within the second approach, the organizational and economic aspect prevails, according to which

is an enterprise that controls the activities of other enterprises, companies or firms. Accordingly, the key factor is to establish control over the economic activities of enterprises within the holding.

Types of holdings

Holdings are formed in two main forms:

1. Pure or simple holding - this structure is a parent company that is exclusively engaged in managing the activities of subsidiaries included in the holding structure. In this type of holding, management can extend not only to general management, but also to intra-organizational processes, for example, personnel management, marketing activities, financial management, sales system, etc.;
2. A mixed or multi-industry holding is a distributed structure in which the parent enterprise, which carries out the functions of managing other enterprises, is also engaged in other types of economic activities, for example, production, sales, supplies, etc. Multi-industry holdings may include enterprises engaged in various types of economic activity, for example, production, sales, sales, which are related to a specific group of goods, services or works.

So holding like management structure characterized by the fact that management in it can be carried out both through participation in the capital of dependent enterprises and through the determination of their economic activities. A variation of the second type of holdings is also the implementation by the parent company of the functions of the sole executive body for subsidiaries.

The holding as a managerial and economic structure is a complex system of individual enterprises with to varying degrees independence and interdependence in conditions of general management. From an organizational point of view, the holding includes a management center and individual enterprises or business units dependent on it.

The formation of a holding can be of an integration or evolutionary nature. Holdings that arise as a result of integration processes are aimed at expanding their presence in new market sectors or reducing costs. Holding companies created in an evolutionary way are distinguished by the multidisciplinary nature of the activities of their enterprises and pursue the goal of diversifying their economic activities or creating a vertically integrated structure from production to sales of goods.

holding company

holding company– this is an organizational structure, it distinguishes the main and subsidiaries, or reflects the property dependence of the holding’s enterprises. Alternative option holding company is the formal equality of the enterprises included in the holding, while implementing the principle of centralized management.

Important! Holding and holding company are homogeneous concepts in organizational and managerial terms.

Characteristics of a holding company:

1. Capital concentration firms from various industries and sectors of the economy or firms located in different regions.
2. Multi-stage– presence of a parent company, subsidiaries and other dependent companies.
3. Centralization of management within the holding company by developing strategic goals by the parent company and coordinating joint actions of group enterprises in the following areas:

• development of a unified strategy and specific development objectives;
• reorganization of companies and determination of the internal structure of the holding;
• implementation of intercompany relations;
• investment financing;
• provision of consulting and technical services.

The managerial and economic essence of the holding is manifested in the principles of its functioning:

1. Enterprises included in the holding company have legal independence, while at the same time being dependent on the parent company in financial aspects, but at the same time weakly depend on each other;

2. Organizational dependence - determined by the legal nature of the relationship between the holding’s enterprises: if the parent company owns subsidiaries legal grounds, then exit from the holding of subsidiaries is impossible; if the holding is formed on a contractual basis, then its participant can leave the holding by purchasing their shares and leaving financial dependence;

3. Technological interdependence of the holding’s enterprises may occur, but is not a determining factor in its organizational existence and economic activity;

4. Geographically, a holding company can be located in different cities, regions, and countries.

Thus, the essence of the holding is determined by its organizational structure, in which a certain dependence has clearly been formed between companies, and the holding structure is managed centrally.

Holding company structure

A key aspect of a holding company as a management and economic structure is the formation of its organizational structure.

Principles of holding formation:

1. Functional principle – the holding structure will be formed on the basis of division organizational interaction by the nature of the activities of separate enterprises;
2. Divisional principle - the structure of the holding is formed on the basis of the profile of products or on the basis of the territorial distribution of the holding's enterprises;
3. Matrix principle - the management chain in the holding is formed both horizontally - divisionally, and vertically - functionally, while simultaneous coordination of production, sales and other processes in different divisions is achieved;
4. The principle of network integration - subsidiaries unite around the parent company, which uses the results of the economic activities of subsidiaries, but does not claim their profits and economic independence;
5. The functional-divisional principle is typical for holdings whose enterprises belong to the same production chain, ultimately forming vertically integrated company groups, for example, in the oil and gas, metallurgical, chemical industries;
6. Divisional-functional principle - represents associations of enterprises distributed within one market or geographically, but belonging to the same technological level, ultimately forming horizontally integrated groups of companies.

The holding company, as a managerial and economic structure, is characterized by the greatest degree of dependence of the enterprises included in the holding, which has a financial basis. The financial basis of the holding is manifested in legal, economic, organizational and economic aspects, determining the organizational and managerial features of the holding.

Literature

1. Golubev M.P. Methodology for creating effective vertically integrated holdings. – M.: Infra-M, 2015. – 528 p.
2. Gribov V.D. Management. – M.: Knorus, 2016. – 280 p.
3. Kardapoltsev K.V. Applied aspects of management. – M.: Yurayt, 2014. – 236 p.
4. Latfullin G.A. Theory and applied aspects of management. – St. Petersburg: Peter, 2016. – 464 p.
5. Sirotkin D.S. Typical holding management models. // Business world. – 2015. – No. 7. – pp. 37-48.
6. Strategic development of the organization. / ed. Yu.N. Lapygina. – M.: Knorus, 2016. – 284 p.

Holding is a derivative of the English word “holding”, “to hold” - one of the possible structural connections between commercial organizations.

A distinctive feature of such a commercial structure is the presence of one or more parent organizations, as well as several subsidiaries controlled by it. The main block of shares of the commercial association is under the control of the parent company, and the remaining shares are distributed among the subsidiaries.

All companies that make up the holding conduct commercial transactions and conclude contracts from own name. But, at the same time, all major issues relating to the general interests of the holding are under the jurisdiction of the main commercial structure.

The advantage of such an association is that all its member firms can compete jointly. Each subsidiary organization takes part to the best of its strength and capabilities.

The role of the central company in the holding

The leading role in this association is played by the central company. Its competence includes:

• Development of a general concept for the development of the commercial community headed by her.
• Formation overall strategy investment policy and financial and commercial activities.
• Control external activities subsidiary companies, as well as their relationships with each other.
• Centralized sales of products produced by the holding, as well as the purchase of raw materials, energy resources, etc. necessary for production.
• Carrying out foreign trade activities.
• Internal financing of production facilities included in the holding.

However, when a commercial association such as a holding is formed, there is a serious threat of slipping into command-administrative methods of internal governance. And this, undoubtedly, can negatively affect the commercial efficiency of the entire enterprise.

Therefore, central management is reduced to To financial policy – issuing shares, calculating and paying dividends, as well as changing the board, which has shown to be ineffective. The change is carried out by convening a meeting of community shareholders.

The controlling functions of the parent organization over its subsidiaries are carried out through:

• Dominance in the authorized capital of a subsidiary.
• Performing the functions of the dominant economic body.
• Other methods permitted by current legislation.

Typical features of a holding

Holdings have several characteristic economic and managerial features:

• Central concentration of shares of subsidiaries engaged in different areas economic activities, or located in different cities and regions.
• Multi-level commercial hierarchy of companies. The holding has subsidiaries, “grandchildren” and even “great-grandchildren” companies. In some cases, the holding structure looks like a pyramid, the top of which is the founding parent company, and at its base there are many small derivative organizations.
• Centralized board, created through the development of a single central company global strategy and coordinating the actions of all holding commercial structures.

Centralization of management can be expressed:

• Development of a unified commercial policy, a comprehensive strategy and determination of tactical tasks for business development.
• In the implementation of intra-holding relations between subsidiary companies.
• Allocation of capital investments to those subsidiaries or projects that are this moment time the most promising.
• Centralized reorganization of subsidiaries, as well as the establishment of the internal structure of the association.

Types of holdings

There are several main types of holdings that have their own distinctive features.On control over its subsidiaries They may be:

• Property - the central company owns the majority stake in the subsidiaries.
• Contractual - the parent company does not have a controlling stake, but carries out management solely in accordance with the concluded agreement.

Depending on the functions of the parent organization, holdings are:

• “Pure”, when the parent company performs exclusively administrative and managerial functions. The parent organization itself does not conduct any independent production.
• "Mixed." The central company performs administrative functions while producing goods or providing commercial services.

Based on relationships between the components of the holding, they are:

• Integrated - subsidiaries are connected to each other through production chains.
• Conglomerate - subsidiary companies are not connected with each other by direct production processes.

From mutual influence:

• Classic, when the bulk of the shares of subsidiaries are controlled by the parent company.
• Cross – the companies that make up the holding own major blocks of shares in each other.
  

A holding company (holding) is a system of commercial organizations that includes a “management company” that owns controlling stakes and/or shares of subsidiaries, and subsidiaries. A management company can perform not only management, but also production functions. A subsidiary is a business company whose actions are determined by another (main) business company or partnership, either by virtue of a predominant participation in the authorized capital, or in accordance with an agreement concluded between them, or otherwise (clause 1 of Article 105 of the Civil Code; clause 2 Article 6 of the Law on joint stock companies; clause 2 art. 6 of the Law on Limited Liability Companies).
Holding companies are emerging all over the world under the influence of integration processes common to all countries. Why do companies unite into a holding company, and not create a concern, conglomerate, or trust?
Holdings are formed for a specific purpose. This is, as a rule, conquering new market sectors and/or reducing costs. Both of these factors increase the value of the company, its capitalization, and to achieve this goal, the effective operation of the entire system, and not just the management company, is necessary.
It should be noted that the value of the holding’s shares also increases only when efficient work the entire system (all its parts - the management company and subsidiaries).
IN Lately The corporate world has been swept by a wave of mergers and acquisitions. Everyone is uniting: car manufacturers, communications specialists, power engineers, computer scientists, financiers.
Let's consider the ways in which commercial organizations can unite into holding companies.
(a) Holding companies can be created, for example, through successive acquisition or acquisition of control over companies that are united by one type of business (mechanical engineering, food industry, agriculture, etc.). This is the so-called "horizontal integration".
The main goal of such holdings is to conquer new market sectors. An example here is the fact that at the beginning of the year, the heads of the leading British tobacco companies British-American Тbacco (BAT) and Rrothmans International, which rank second and fourth in the world in terms of sales, announced plans to create a single concern that would become the largest global manufacturer of tobacco products. The transaction amount is estimated at £13 billion. New company with total sales of 21.32 billion dollars and a capacity of 1 trillion cigarettes per year will control about 17% of the world market.
(b) The second way to form holding companies is to unite enterprises of a single technological cycle (from raw materials to finished products). This is the so-called "vertical integration".
The main goal of such a merger is to reduce overall costs, achieve price stability, and increase the value of the company. An example is the merger of a power plant and a coal mine in the Primorsky Territory at the end of last year. From the Primorskaya State District Power Plant and the Luchegorsky open-pit mine, the LuTEK company was formed, the controlling stake of which went to RAO UES of Russia. The goals of this bold experiment were quite clear - to reduce the cost of electricity (and this is a serious problem in the Primorsky Territory) and to fairly distribute money between power engineers and coal miners. Thanks to this merger, production volume increased by 6%, the cost of coal decreased by 3%, electricity by 17%, and profits increased by 59%.
(c) Holding companies can also be created through the sequential creation of enterprises and their subsequent accession to the group. This is exactly what the “steel king” Andrew Carnegie did almost 130 years ago. In his autobiography, he writes that only after the enterprise he created had proven its effectiveness did he include it (in one way or another) in his group.
This policy allowed him to avoid large losses due to ineffective operation or bankruptcy of the new enterprise. McDonald's also adheres to the tactics of sequential accession. As a contribution, it transfers a trademark, management technology, etc.
(d) In practice, there are examples of mergers not only of individual commercial organizations, but also of holding companies. For example, the merger of a well-known steel concern in Germany and a similar one in the Netherlands was implemented as follows. Their owners: the companies KN Hoogovens NV and Hoesch AG created on a parity basis (50% x 50%) the management company Estel NV to which they transferred 100% of the concerns' shares as their contributions.
(e) Transnational and national companies are united according to similar schemes. When the largest Belgian and Indian beer concerns merged, the following scheme was implemented. Having established the management company SUN-Interbrew (based on Sun-Brewing) on ​​a parity basis, each received 34% of the shares. As a contribution to the authorized capital, the Belgians transferred shares of the Rossar and Desna factories, the Stella Artois beer trademark, plus $40 million. Indians - shares of factories and distribution network. In addition, 32% of the shares of the new company will be sold by public subscription.
(f) A significant number of holding companies were also formed through the “division” of large companies during their restructuring. This method was typical for many Russian enterprises in the early 90s during the transition to self-sufficiency. The transformation led to the creation of a large number of subsidiaries (former production facilities) with 100% participation of the parent company.
All of the above procedures for the formation of holding companies can be carried out as follows:
-by purchasing shares on the secondary market, which is carried out by a broker;
-by exchanging shares specially issued for this purpose by each enterprise. This is exactly what the general director of Uralmash Plants, Kakha Bendukidze, did to gain control over Izhora Plants (each group was a holding company). To do this, he carried out an additional issue and exchanged the entire package of the additional issue for the already existing package of Izhora Plants. Due to the difference in the value of the shares, he received control of the plant for a small percentage of his shares.
-by creating a special management company, where the founders transfer blocks of shares of enterprises that they want to include in the holding. At the same time, the transferred shares of the enterprises were exchanged for issued shares of this company.

by transferring key patents, copyrights, know-how for a given business ( example - company"McDonald's"). Recently, in our country, an aggressive method, popular in the West, of gaining control over companies through bankruptcy procedures has begun to be used. “A rigid and closed system of property redistribution has formed in the bankruptcy market,” writes Expert. Moreover, you can gain control over a competitor or even buy it by acquiring the debts of this enterprise and carrying out the necessary actions determined by bankruptcy law. By the way, the bankruptcy procedure is widely used for transformations and division of parts of holding structures, alienation of part of a group with subsequent inclusion in its own holding. Let's quote Expert magazine again - "Ninety-five percent of today's bankruptcies in Russia are carried out for the purpose of redistributing property... and occur as part of the process when any commercial structure builds its vertical...". One can recall, for example, Mr. Bykov’s attempt to gain control over the entire energy sector of the Krasnoyarsk Territory and his conflict with Governor A.I. Swan. Judging by the publications of Expert and Kommersant, this is an almost universal way of acquiring enterprises in Russia. This can be indirectly judged by the activity of our legislators, looking at the monitoring of legislation. For example, the latest instruction of the Central Bank of the Russian Federation regulating the procedure for replacing bank liabilities with their convertible liabilities - the owners of these liabilities can exchange them for shares of the debtor bank and then sell its property. It should be noted that another way of forming holdings (both “from above” and “from below”) is the association of manufacturers and financial structures. For example, the purchase by a bank of blocks of shares in enterprises led to the fact that banks began to own blocks of enterprises from different industries of different sizes. After some time, banks were forced to create management companies, to which they transferred blocks of shares of enterprises from one type of business, and the “extra” enterprises were forced to “dump”. This is what Menatep Bank, Onexim Bank and others did. Education “from below” occurred when industrial enterprises To attract investments and increase attractiveness, a management company was created together with the investor (often with a group of investors who form a syndicate). Shares of shares were determined based on an assessment of the value of enterprises and the shares of investors. To implement this procedure, an issue prospectus is prepared and placed: private (as in in this case) or open. Unlike the case of a separate enterprise, a private placement is almost always used to create a holding structure. Often, mergers, divisions and acquisitions are carried out in already created and successfully operating holdings.