Common Ownership

Common ownership refers to situations where the same group of investors (‘common owners’) simultaneously hold shares in several competing firms. The term came to existence to highlight a recent financial phenomenon with potentially significant competitive implications: a small group of large and diversified institutional investors increasingly have parallel minority investment positions in many publicly listed companies, not only across the economy but also within one and the same industry. ‘Horizontal shareholding’ is an alternative term used to describe this phenomenon when common shareholdings are held in horizontal competitors specifically (Elhauge 2016). Common ownership by minority financial investors can be situated in the broader context of the theory of mergers and acquisitions. It is the latest manifestation of the manifold ways that rival industrial firms may come under common ownership and control: suggesting that, besides full mergers and controlling partial acquisitions, standalone non-controlling partial acquisitions may also give rise to significant antitrust concerns (Tzanaki 2022). Interestingly, common ownership may also produce efficiencies under certain circumstances. Yet, the extent to which merger control rules may capture and remedy common minority shareholdings is neither comprehensive nor uniform across jurisdictions.