Q:

What are examples of conglomerates?

A:

General Electric, Siemens, United Technologies, Hutchison Whampoa, Honeywell International and ABB rank among the biggest and most powerful conglomerates in the world. A conglomerate is a large corporation that owns companies in different industry sectors.

The main corporation is the parent company, and the various enterprises underneath are known as subsidiary companies. Conglomerates gained popularity in the 1960s when companies began diversifying their business models through leveraged buyouts, mergers and acquisitions. The focus of successful conglomerates is on market, geographic and product diversification.

A benefit of the conglomerate model is the diversification of risks across different companies to reduce the impact of major financial setbacks. If a single subsidiary experiences economic problems, it does not trouble the entire corporation.

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