1.4 Concerns

A concern is a type of business group common in Europe, particularly in Germany. It results from the merger of several legally independent companies into a single economic entity under unified management.

A concern consists of a controlling enterprise and one or more controlled enterprises. The relationship between the controlling and controlled enterprises is based on the actual commercial and management relationships, unlike parent and subsidiary companies which are related by share ownership and voting rights. There are several types of concerns:

• Contractual Concern. In this form of concern, the controlling enterprise and controlled enterprise enter into a control agreement – wherein the controlling enterprise can obtain management powers over the controlled enterprise, sometimes amounting to complete control – and/or a profit transfer agreement. These powers may be used in a way that is detrimental to the subsidiary, provided that they are in the interests of the concern and do not damage the legal separateness of the subsidiary. In return, the controlling enterprise is liable to compensate the controlled enterprise for all deficits of the controlled enterprise during the term of the agreement.

• Factual Concern. In this form of concern, the controlling enterprise exerts a controlling influence on the controlled enterprise, but there is no formal control or profit transfer agreement. If one company owns a majority in another company, then the first company is deemed to exert a controlling influence. The parent company is then liable for any damage which results from the interference of the parent company in the subsidiary, which is judged on a case-by-case basis. This kind of concern is more difficult to establish and so is more common.

• Flat Concern. In this version, there is no parent company, instead a number of legally separate companies are subject to common direction.

Henkel AG & Company, KGaA, is a German chemical and consumer goods concern headquartered in Düsseldorf, Germany. It is a multinational company active both in the consumer and industrial sector. Founded in 1876, the DAX 30 company is organized into three globally operating business units (laundry & home care, beauty care, adhesive technologies) and is known for brands such as Loctite, Persil, and Fa amongst others [2].

In the fiscal year 2016, Henkel reported sales of 18.1 billion euros and an operating profit of 2.9 billion euros. More than 80 percent of its about 50,000 employees work outside of Germany.

1.5 Holdings

A holding company is a company that owns other companies outstanding stock. The term usually refers to a company that does not produce goods or services itself; rather, its purpose is to own shares of other companies to form a corporate group. Holding companies allow the reduction of risk for the owners and can allow the ownership and control of a number of different companies. In the United States, 80% or more of stock, in voting and value, must be owned before tax consolidation benefits such as tax-free dividends can be claimed. That is, if Company A owns 80% or more of the stock of Company B, Company A will not pay taxes on dividends paid by Company B to its stockholders, as the payment of dividends from B to A is essentially Company A transferring cash from one company to the other. Any other shareholders of Company B will pay the usual taxes on dividends, as they are legitimate and ordinary dividends to these shareholders. Sometimes a company intended to be a pure holding company identifies itself as such by adding "Holding" or "Holdings" to its name.

The Nestlé S.A. holding is a Swiss transnational food and drink company headquartered in Vevey, Vaud, Switzerland. It has been the largest food company in the world, measured by revenues and other metrics, for 2014, 2015, and 2016. It ranked No. 72 on the Fortune Global 500 in 2014 and No. 33 on the 2016 edition of the Forbes Global 2000 list of largest public companies.

Nestlé's products include baby food, medical food, bottled water, breakfast cereals, coffee and tea, confectionery, dairy products, ice cream, frozen food, pet foods, and snacks. Twenty-nine of Nestlé's brands have annual sales of over CHF1 billion (about US$1.1 billion), including Nespresso, Nescafé, Kit Kat, Smarties, Nesquik, Stouffer's, Vittel, and Maggi. Nestlé has 447 factories, operates in 194 countries, and employs around 339,000 people. It is one of the main shareholders of L'Oreal, the world's largest cosmetics company.

Nestlé was formed in 1905 by the merger of the Anglo-Swiss Milk Company, established in 1866 by brothers George and Charles Page, and Farine Lactée Henri Nestlé, founded in 1866 by Henri Nestlé (born Heinrich Nestle). The company grew significantly during the First World War and again following the Second World War, expanding its offerings beyond its early condensed milk and infant formula products. The company has made a number of corporate acquisitions, including Crosse & Blackwell in 1950, Findus in 1963, Libby's in 1971, Rowntree Mackintosh in 1988, and Gerber in 2007.

Nestlé has a primary listing on the SIX Swiss Exchange and is a constituent of the Swiss Market Index. It has a secondary listing on Euronext. In 2011, Nestlé was listed No. 1 in the Fortune Global 500 as the world's most profitable corporation. With a market capitalisation of US$239.6 billion, Nestlé ranked No. 11 in the FT Global 500 2014.