Cascading Control Pyramids

“What does Bernheim explain to him? Instead of having a majority, that is to say 51% of the capital of a company A, it is better to hold 51% of a purely financial company B, which itself will hold 51% of company A. The same control over company A can be achieved by dividing the initial investment by two. The reasoning can be extended indefinitely. These are the basic principles of cascading holdings, Russian doll structures, or even stovepipe schemes. The technique is as old as the world.”

“Carlo De Benedetti, Jean-Luc Lagardère and Vincent Bolloré are closely inspired by it. Bernard Arnault, on the other hand, will go so far as to build a real pyramid. The interest of the system lies in its far-sighted philosophy. From a minimal investment, it will be possible to target much larger targets, while carefully avoiding launching a costly takeover bid.”