Who Controls Allianz? - Measuring the Separation of Dividend and Control Rights under Cross-Ownership among Firms

With cross-ownership among firms a separation between dividend rights on common stocks and voting rights may occur. This paper proposes a method to trace control rights in a company that is based purely upon accounting identities and the underlying data on cross-ownership relations among firms and privately held shares. Examples show that under cross-ownership, control and ownership of dividend rights may be entirely separated, and multiple equilibria may exist in such economies. The proposed methodology is then applied to the conglomerate around the German ‘Allianz’ group. (authors' abstract)