Can two companies own 100% of each other?
Can two companies own 100% of each other?
Yes, two companies can own 100% of each other. The best example of this is Berkshire Hathaway (BRK), which is headed by Warren Buffet, and General Reinsurance Corporation (GNRC) a wholly owned subsidiary of Berkshire.
Possibility of two companies to be 100 percent owned by each other
Let's start with what two companies can do: a company might own the majority of its competitor's stock or vice versa. That means that one company owns over 50 percent of the voting shares of the other, but does not necessarily own a majority of the total value of the other's assets.
Example
The most famous example of this is Google and Alphabet, where Google owns around 80% of Alphabet's outstanding stock, but has only 59% of its market capitalization because it doesn't have nearly as many total shares outstanding as Alphabet does.
In Theory
It is possible for two companies to be each 100% owned by the other. You could take a company, dissolve it in its entirety into a shell corporation (one with no assets or operations), and then transfer all of that dissolved company's equity to another company in exchange for stock in that second-to-last company. If you did that, then technically you could say that the original company was now 100% owned by the second-to-last.
It is not often
It's not often that you see two companies in the same industry own 100% of each other, but it does happen. And it's a great idea for both companies and their investors.
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