trade investment

trade investment

the acquisition of STOCKS and SHARES in one FIRM by another firm. Trade investments may be undertaken for a variety of reasons including the profitable investment of surplus cash; the protection or advancement of an existing contractual trade relationship by a more direct involvement (for example, a supplier might buy a stake in a customer firm); the provision of a launching pad for a possible future TAKEOVER or merger. Where the trade investment involves the acquisition of a large but not controlling proportion of a company's shares then that company becomes an ASSOCIATED COMPANY.

See QUOTED INVESTMENTS, UNQUOTED INVESTMENTS.

Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson