DEFINITION of Holdco
Holdco is an abbreviation for holding company, which is a firm that exercises control over one or more other firms. This is accomplished through the acquisition of stock that is sufficient to control or influence voting by shareholders. The holding company earns money by collecting the dividends from the shares of firms in which it owns a controlling interest.
BREAKING DOWN Holdco
The establishment of a holding company can be both less expensive and legally complicated than a merger or consolidation, making it an attractive means of gaining control of another company. A holdco is also known as a parent company.