Editing Conglomerate (company) (section)

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{{short description|Large company involved in many industries}}
A '''conglomerate''' ({{IPAc-en|k|ə|ŋ|ˈ|ɡ|l|ɒ|m|ə|r|ə|t}}) is a type of '''multi-industry company''' that consists of several different and unrelated [[List of legal entity types by country|business entities]] that operate in various industries. A conglomerate usually has a [[Holding company|parent company]] that owns and controls many [[Subsidiary|subsidiaries]], which are legally independent but financially and strategically dependent on the parent company. Conglomerates are often large and [[Multinational corporation|multinational corporations]] that have a global presence and a diversified portfolio of products and services. Conglomerates can be formed by [[merger and acquisition]]s, [[Corporate spin-off|spin-offs]], or [[joint venture]]s.

Conglomerates are common in many countries and sectors, such as [[Media (communication)|media]], [[Finance|banking]], [[Energy industry|energy]], [[mining]], [[manufacturing]], [[retail]], [[Arms industry|defense]], and [[transportation]]. This type of organization aims to achieve [[economies of scale]], market power, [[Risk management|risk diversification]], and financial synergy. However, they also face challenges such as complexity, [[bureaucracy]], agency problems, and [[Government regulation|regulation]].<ref name=":0" />

The popularity of conglomerates has varied over time and across regions. In the [[United States]], conglomerates became popular in the 1960s as a form of [[economic bubble]] driven by low interest rates and leveraged buyouts.<ref>{{Cite web |title=Conglomerate Boom: What It Is, How It Works, Example |url=https://www.investopedia.com/terms/c/conglomerate-boom.asp |access-date=2024-05-16 |website=Investopedia |language=en}}</ref> However, many of them collapsed or were broken up in the 1980s due to poor performance, accounting scandals, and [[antitrust]] regulation.<ref>{{Cite journal |last1=Davis |first1=Gerald F. |last2=Diekmann |first2=Kristina A. |last3=Tinsley |first3=Catherine H. |date=1994 |title=The Decline and Fall of the Conglomerate Firm in the 1980s: The Deinstitutionalization of an Organizational Form |url=https://www.jstor.org/stable/2095931 |journal=[[American Sociological Review]] |volume=59 |issue=4 |pages=547–570 |doi=10.2307/2095931 |jstor=2095931 |issn=0003-1224|url-access=subscription }}</ref> In contrast, conglomerates have remained prevalent in Asia, especially in [[Greater China|China]], [[Japan]], [[South Korea]], and [[India]]. In [[mainland China]], many [[State-owned enterprises of China|state-affiliated enterprises]] have gone through high value [[mergers and acquisitions]], resulting in some of the [[List of largest mergers and acquisitions#State-owned enterprises|highest value business transactions]] of all time. These conglomerates have strong [[Crony capitalism|ties with the government]] and preferential policies and access to capital.<ref name=":0">{{Cite web |last=Chen |first=James |date=July 31, 2023 |title=Conglomerate |url=https://www.investopedia.com/terms/c/conglomerate.asp#:~:text=A%20conglomerate%20is%20a%20corporation%20made%20up%20of%20several%20different,ways%2C%20including%20mergers%20or%20acquisitions. |access-date=2023-11-23 |website=Investopedia |language=en}}</ref>