Alphabet Reorganization Completed; Creates New ‘XXVI’ Holding Company

Almost two years ago, Google announced that their entire business model was going through a major change and a new parent company Alphabet was announced. The company began reorganizing then and it has taken them almost two years to complete what they had planned then.

Google had been entering a number of markets and sectors and they were looking for an organizational structure which would help it give proper focus to each of these units as a corporate. This was why Alphabet was born. The restructuring of Alphabet was completed today as XXVI Holdings Inc. – Alphabet’s latest holding company was created.

XXVI will now hold the equity of each company under the parent company, which includes Google too. This means that Google is now separated from other companies under Alphabet such as Waymo, Verily etc. Many of these companies which acted independently from Google were called ‘Other Bets’ in the past. With the company finally gaining a proper structure, all the subsidiaries will now become a part of the main organization.

Google too, is changing from a corporation to a Limited Liability Company. This change is being made to all the companies under Alphabet as the parent company perhaps wants to make sure that problems in one of subsidiaries does not spread to the others and that they can function independently.

XXVI, the newly formed Holdings company stands for 26 in Roman numerals – which is also the number of alphabets. Here’s what the official FCC filing reads:

As a result of the corporate reorganization, Alphabet and Google will be able to operate in a more efficient, economical, and transparent manner, allowing the companies to concentrate on their revenue generating activities.

The company says that this is a ‘legal formality’ and nothing will change when it comes to the internal functioning of the organizations or the way they pay taxes. Stay tuned with us for more updates on this story.

Source: Bloomberg