Control Premium

A control premium is the additional amount that a buyer is willing to pay for a company because they would gain controlling interest in it. This means the buyer would have significant say over major decisions and operations. The premium reflects the value of having control, which can lead to more efficient management, potential cost savings, or strategic advantages. For instance, if a company is valued at $2 million, a buyer might pay $2.5 million to acquire it, viewing the extra $500,000 as the value of control.