linguistic:voice_change, structural:summarization, structural:scholar_edition, stylistic:tone
A conglomerate is a type of multi-industry company that consists of several different and unrelated business entities that operate in various industries under one corporate group. A conglomerate usually has a parent company that owns and controls many subsidiaries, which are legally independent but financially and strategically dependent on the parent company. Conglomerates are often large and multinational corporations that have a global presence and a diversified portfolio of products and services. Conglomerates can be formed by merger and acquisitions, spin-offs, or joint ventures. Conglomerates are common in many countries and sectors, such as media, banking, energy, mining, manufacturing, retail, defense, and transportation. This type of organization aims to achieve economies of scale, market power, risk diversification, and financial synergy. However, they also face challenges such as complexity, bureaucracy, agency problems, and regulation. 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. However, many of them collapsed or were broken up in the 1980s due to poor performance, accounting scandals, and antitrust regulation. In contrast, conglomerates have remained prevalent in Asia, especially in China, Japan, South Korea, and India. In mainland China, many state-affiliated enterprises have gone through high value mergers and acquisitions, resulting in some of the highest value business transactions of all time. These conglomerates have strong ties with the government and preferential policies and access to capital.