Try to enter international system of business!

1. What is the conglomerate?
Kobulashvili Tornike

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. 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.  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. 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. 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. 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. THE END