- Cross Holding
- A situation in which a publicly-traded corporation owns stock in another publicly-traded company. So, technically, listed corporations own securities issued by other listed corporations. Cross holding can lead to double counting, whereby the equity of each company is counted twice when determining value. When double counting occurs, the security's value is counted twice, which can result in estimating the wrong value of the two companies.
Companies that have cross holdings are susceptible to confusion and management holdout in cases of company mergers and acquisitions, because one company might refuse consent to the other, and vice versa. Also, if Company A holds stocks or bonds in Company B, the value of this security might be counted twice, in error, because these securities would be counted when determining the value of the company issuing the security, and again when looking over the securities held by the other company.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
cross-holding — ˌcross ˈholding noun [countable] a situation in which one company owns part of another company, which itself owns part of a third etc: • groups of firms with a web of cross holdings in each other * * * cross holding UK US noun [C or U] (also… … Financial and business terms
cross holding — /krɒs həυldɪŋ/ noun a situation where two companies own shares in each other in order to stop either from being taken over ● The two companies have protected themselves from takeover by a system of cross holdings … Dictionary of banking and finance
cross holding — n. (Business) situation when listed corporations own stock issued by other listed corporations … English contemporary dictionary
cross-holding — A situation in which two or more companies hold shares in each other in order to cement business ties and forestall takeovers … Big dictionary of business and management
holding — hold‧ing [ˈhəʊldɪŋ ǁ ˈhoʊl ] noun [countable] FINANCE 1. an amount of a particular type of investment owned by a person or organization: holding of • He has doubled his usual holdings of government securities to more than $10 billion. • Itsreal… … Financial and business terms
Holding — Hold‧ing [ˈhəʊldɪŋ ǁ ˈhoʊl ] also Holdings noun used in the name of holding companies: • Glaxo Holdings PLC * * * holding UK US /ˈhəʊldɪŋ/ noun [C] FINANCE ► assets such as property, shares, or cash that a government, company, or person owns … Financial and business terms
cross-shareholding — UK US noun [C or U] ► CROSS HOLDING(Cf. ↑cross holding) … Financial and business terms
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