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what is conglomerate?

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what is conglomerate?

  1. 1. What is the conglomerate? Kobulashvili Tornike
  2. 2. WHAT IS THE CONGLOMERATE?  A conglomerate is a combination of two or more corporations engaged in entirely different businesses that fall under one corporate group. Often, a conglomerate is a multi-industry company. Conglomerates are often large and multinational. The most common type of conglomerate is a parent company with one or more subsidiaries, which are partially or wholly-owned companies.
  3. 3. CORPORATIONS FORM CONGLOMERATES FOR A VARIETY OF REASONS:  The desire to become involved in a business that is different from the company's main focus.  A desire to diversify so that, for example losses in one business may be offset by gains in another.  An intention to transition the company toward a new area of business.  Attractive revenues, either historical or projected, from the prospective subsidiary.  A need to protect company's established business from risks associated with the subsidiary.
  4. 4.  When a conglomerate owns less than a controlling percentage of another company's voting stock, the second company is known as an associate or an affiliate.
  5. 5. EXAMPLE: The Walt Disney Corporation owns about a 40% stake in the History Channel, an 80% stake in ESPN and a 100% interest in the Disney Channel. In this case, the History Channel is an affiliate company, ESPN is a subsidiary and the Disney Channel is a wholly owned subsidiary company.
  6. 6. OTHER EXAMPLES:  Nestlé is a Swiss multinational food and beverage company.  Nestlé owns 30% of the world's largest cosmetics and beauty company L'Oréal and its brands including Garnier, Maybelline, and Lancôme as well as The Body Shop stores.  Nestlé owned 100% of Alcon. But then Nestlé sold Alcon shares to the Swiss pharmaceutical giant Novartis.
  7. 7. OTHER EXAMPLES:  Virgin Group LTD is a British multinational branded venture capital conglomerate company. Its core business areas are travel, entertainment and lifestyle and it consists of more than 400 companies worldwide.  AirAsia X — long-haul budget airline operating from Malaysia (16% owned by Virgin Group)  Virgin Books — publisher, retailer and distributor of books (10% owned by Virgin Group)
  8. 8. THE END
  • JodySimms1

    Jan. 29, 2019
  • Hoersten

    Nov. 5, 2015

Try to enter international system of business!

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