conglomerate

conglomerate

[n., adj. kuhn-glom-er-it, kuhng-; v. kuhn-glom-uh-reyt, kuhng-]
conglomerate, corporation whose asset growth, often very rapid, comes largely through the acquisition of, or merger with, other firms whose products are largely unrelated to each other or to that of the parent company. Merger to gain monopoly ("horizontal integration") was notable at the end of the 19th cent.; somewhat later, acquisition of suppliers or buyers ("vertical integration") became fairly common. Conglomerates did not emerge until the 1960s, when they quickly became popular among investors. Their stock prices often rose (and sometimes fell) spectacularly. Economic advantages attributed to the conglomerate include protection against overspecialization, availability of management expertise, and reduced costs. The rise of the conglomerate in the 20th cent. has been attributed to restrictions imposed by antitrust laws: As businesses were constrained within their own industry, they instead expanded into different markets. This trend greatly intensified during the 1980s and 1990s (see merger); a notable exception was ITT, which split up (1995) its companies to strengthen operations. The mid-2000s again saw the breakup of a number of conglomerates, most notably Cendant and Viacom, when investors seemed to favor more focused companies over larger companies with disparate businesses, but other conglomerates continued to thrive and grow.
conglomerate, in geology, sedimentary rock composed largely of pebbles or other rounded particles whose diameter is larger than 2 mm (.08 in.). Essentially a cemented gravel, conglomerates are formed along beaches, as glacial drift, and in river deposits. Conglomerates formed of angular shaped pebbles are called breccias.

In business, a widely diversified company, especially a corporation that acquires other firms whose activities are unrelated to its primary activity. Conglomerate mergers are undertaken for many reasons, including the prospect of making additional use of existing facilities, improving the corporation's overall marketing position, decreasing the risk of relying on a single type of product, and effecting corporate reorganization. The practice was widespread in the 1960s and 1980s, but in the 1990s many conglomerates began to sell off unwanted subsidiaries.

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