Affiliated Companies

AAA

DEFINITION of 'Affiliated Companies'

Companies that are less than 50% owned by a parent company; the parents are minority shareholders. More loosely, the term "affiliated companies" is sometimes used to refer to companies that are related to each other in some way. For example, Bank of America has numerous affiliated companies, including Banc of America, US Trust, Landsafe, Balboa and Merrill Lynch.

INVESTOPEDIA EXPLAINS 'Affiliated Companies'

By way of contrast, a subsidiary is more than 50% owned by its parent; the parent is a majority shareholder. Affiliates and subsidiaries are common ways for banks to enter foreign markets and be allowed to underwrite securities. Affiliates and subsidiaries are also used in foreign markets to give the impression that the company is not foreign-owned and thereby avoid any negative consequences that might be associated with consumers' perceptions of foreign ownership. For example, consumer goods company Unilever is a Dutch and British company; it calls its Indian subsidiary Hindustan Unilever.

RELATED TERMS
  1. Unconsolidated Subsidiary

    A company that is owned by a parent company, but whose individual ...
  2. Acquisition

    A corporate action in which a company buys most, if not all, ...
  3. Wholly Owned Subsidiary

    A company whose common stock is 100% owned by another company, ...
  4. Keiretsu

    A Japanese term describing a loose conglomeration of firms sharing ...
  5. Merger

    The combining of two or more companies, generally by offering ...
  6. Minority Interest

    1. A significant but non-controlling ownership of less than 5 ...
Related Articles
  1. Mergers And Acquisitions: Understanding ...
    Fundamental Analysis

    Mergers And Acquisitions: Understanding ...

  2. What Are Corporate Actions?
    Bonds & Fixed Income

    What Are Corporate Actions?

  3. Mergers & Acquisitions: An Avenue For ...
    Forex Education

    Mergers & Acquisitions: An Avenue For ...

  4. Sneaky Subsidiary Tricks Can Cloud Financials
    Investing Basics

    Sneaky Subsidiary Tricks Can Cloud Financials

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center