Conglomerate (company)

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The conglomerate is a combination of two or more corporations, which are engaged in a completely different business, under the same corporate structure, often involving a parent company and various (or many) subordinate companies. Often the conglomerate is a multi-industrial company. The conglomerate is often large and multinational.

Modernization

The conglomerate was popular in the 1960s due to low interest rates and repeated beer / bull market, which gave the opportunity to buy companies on profit, sometimes even at a reduced rate temporarily . Famous examples from the 1960s include Ling-Temco-Watt, IIT Corporation, Litton Industries, Textron, Teledayan, Gulf and Western Industries and Transamerica. As long as the target company has more profits than the interest on the loan, the conglomerate looks at the return on investment (ROI). In addition, in the conglomerate, the money market or capital market has more capacity to borrow compared to the small firm of their community bank.

For several years it was enough to increase the company's share price, because the companies often used to legitimately value their ROI. The aggressive attitude among the collectors was that investors, who saw non-interceptible force in a powerful and open form in the business, incited to buy shares. Based on the value of their shares, higher share prices have prompted them to raise more debt and more companies are encouraged to buy them. It gave direction to a chain reaction, which prompted them to move fast forward.

However, this development was somewhat confusing. As soon as the interest rate began to increase due to the lack of inflation, the benefits of the conglomerates were stopped. Investors also saw that the companies were not growing as fast as they were before the group, while buying a company was the argument that synergies would lead them to greater efficiency. By the late 1960s, they were under market pressure and they sold shares widely. To keep companies running, the conglomerates were forced to sell recently purchased companies and by the mid-1970s, most of them were limited. The conglomerate's fad later shifted to a relatively new idea, such as the core competence of the company.

In other cases, the construction of the conglomerate was done for the actual interests of diversification. However, the companies with the orientation of the above manipulation of the ROI above the paper can only earn, or can start new branches in other sectors when they Believe that this will increase profits or stability. With the impetus of cash during the 1980s, General Electric also turned to financial or financial services, which was responsible for 45% net income of the company in 2005. GE is also the owner of NBC Universal, which owns the NBC Television Network and various cable networks. In some ways, GE differs from typical conglomerates of the 1960s in that it was not a high level beneficiary and when the interest rate increased, they used it for their benefit, as if buying a new equipment using the loan Than was less expensive than lease. United Technologies has proven itself as an example of a very successful conglomerate.

Another example of successful conglomerate is Warren Buffett's Berkshire Hathaway, a holding company, which uses its surplus derived from insurance subsidies to invest in various production and service businesses. International

Due to the end of World War I, there was a small economic crisis in Germany which entailed entrepreneurs to buy diverse businesses at a lower cost. The most successful, Hugo Stinnes, founded the most powerful private financial conglomerate called Stinus Enterprises in the 1920s - Europe which embraced diverse fields such as production, mining, hotels, shipbuilding, newspaper and other financial companies. / p>

The well-known and best British conglomerate was Hansen PLUS. It followed the timecale different from the above example of America, because it was established in 1964, and between 1993 and 1997, it was transformed into a conglomerate with four different companies listed separately.

In Japan, a different conglomerate model, Keartsu, developed. While the western model of the group is manufactured from a single corporation with various subsidiaries and controlled by the same corporation, Keretsu interlocking is linked to shareholders and a central role of a bank. Mitsubishi is known as one of the best conglomerates in Japan, which has reached production from electronics like television to automobile manufacturing.

In South Korea, Shibbol is a conglomerate that is owned and operated by a family owned by him. There is also a Shibbol right, because most of the current presidents of the Chebols are the successors of their father or grandfather. Some of the famous Korean chibbs are Samsung, LG and Hyundai's Automotive Group.

The era of licensing raj (1947-1990) in India has produced many conglomerates such as Tata Group, Kirloskar Group, Essar Group, Reliance ADA Group Group, Reliance Industries, Aditya Birla Group and Bharti Enterprises. Benefits loss

Some people present the low cost of conglomerate stock (this fact is known as conglomerate rebate) as evidence of these losses, while other traders believe that this tendency is inability to market which Deprecated the right strength of shares. Media conglomerate अधिक जानकारी के लिए देखें: Media conglomerates and Concentration of media ownership

In the 1999 book No Logo, Naomi Kellin presented various examples of merger and acquisition between the media companies for the purpose of synergy and the designers designed to create a conglomerate. Food conglomerate

Similar to other industries, there are many companies in the same way that can be called a conglomerate. Also see them Notes

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