Ownership Structure and Financial Structure in Italian Listed Groups

The study aims to update and further investigate previous research into Italian listed groups, using a methodology that integrates information from the main databases with analysis of the financial structure extracted from consolidated financial statements. This analysis clear results. For example, we find that out of 207 groups examined, in over half the cases the listed parent company is controlled by a single shareholder, whose share exceeds 85 percent, considering the top ten shareholders. We note, however, other significant aspects. Group structure appears to be a powerful lever, not so much in raising capital from minority shareholders, but especially in obtaining external funding and limiting the possibility that the related risk be transferred to the holding and its shareholders. In fact, the groups examined have an average leverage between minority and majority capital of only 0.2, while debt-to-equity ratio of the majority is 2.5. If we bear in mind that the debt ratio calculated on the holding company is only 1.25, what is striking is the effect of debt leverage on equity leverage. In short, in shifting from the financial structure of the holding company to that of the group, a minority capital contribution of just 0.2 leads to an increase of the debt resources of 1.25, with a leverage of 6.25.