Wholly owned affiliates are foreign offices, facilities, and manufacturing plants that are 100 percent possessed by the parent company.
A wholly owned affiliates is a company whose common stock is 100 percent owned by another company. A company can become a wholly owned subsidiary through an acquisition by a parent company.
However, wholly owned subsidiaries allow the parent company to manage, diversify, and possibly reduce its risk. Wholly owned subsidiaries retain legal control over processes, operations, and products.
Hence, having a wholly owned subsidiary may help the parent company in order to maintain operations in diverse geographic areas and markets or separate industries.
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