39-478: Shapoorji Pallonji & Company Private Limited (SPCPL) , trading as Shapoorji Pallonji Group , is an Indian conglomerate headquartered in Mumbai . Its primary business interests include construction and engineering, infrastructure, real estate, energy, and textiles, among others. The company was headed by a grandson of founder Pallonji Mistry, also named Pallonji Mistry , until 2012, when he announced his retirement and
78-429: A market inefficiency , which undervalues the true strength of these stocks. In her 1999 book No Logo , Naomi Klein provides several examples of mergers and acquisitions between media companies designed to create conglomerates to create synergy between them: A relatively new development, Internet conglomerates, such as Alphabet , Google's parent company belong to the modern media conglomerate group and play
117-697: A 25% stake in Swiss consumer products company Lux International. In 2013, Eureka Forbes increased its stake to become the controlling shareholder in Lux International. In 2022, Advent International bought out Shapoorji Pallonji Group 's entire stake in Eureka Forbes, after Eureka Forbes was separated from Forbes & Company and listed on the BSE . In 2000, the Eureka Forbes Institute of Environment (EFIE)
156-450: A brief involvement with Bollywood . Released in 1960, K. Asif 's Mughal-e-Azam was funded by the group with a budget of ₹ 1.5 crore, which made it the most expensive Bollywood film till then and a record it held for many years. More than four decades later, the group funded a digital remastering of the film at a budget of ₹ 5 crore, which was released on 12 November 2004. Shapoor Mistry, grandson of Shapoorji Pallonji Mistry, thought it
195-480: A disorienting and demoralizing experience for executives at acquired companies—those who were not immediately laid off found themselves at the mercy of the conglomerate's executives in some other distant city. Most conglomerates' headquarters were located on the West Coast or East Coast , while many of their acquisitions were located in the country's interior. Many interior cities were devastated by repeatedly losing
234-619: A fitting tribute to complete his grandfather's unfinished dream of colourising the film, especially as the original was produced by his grandfather. In 2016, Shapoorji Pallonji Group, in association with the National Centre for the Performing Arts (India) , co-produced Mughal-e-Azam , a Broadway -style musical directed by Feroz Abbas Khan , and based on the 1960 Bollywood film Mughal-e-Azam . Conglomerate (company) A conglomerate ( / k ə ŋ ˈ ɡ l ɒ m ə r ə t / )
273-540: A focus in Asia.) In Japan, a different model of conglomerate, the keiretsu , evolved. Whereas the Western model of conglomerate consists of a single corporation with multiple subsidiaries controlled by that corporation, the companies in a keiretsu are linked by interlocking shareholdings and a central role of a bank. Mitsui , Mitsubishi , Sumitomo are some of Japan's best-known keiretsu, reaching from automobile manufacturing to
312-638: 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
351-480: A major role within various industries, such as brand management . In most cases, Internet conglomerates consist of corporations that own several medium-sized online or hybrid online-offline projects. In many cases, newly joined corporations get higher returns on investment , access to business contacts, and better rates on loans from various banks. Similar to other industries many companies can be termed as conglomerates. Eureka Forbes Eureka Forbes Limited
390-627: A reservoir on Malabar Hill which supplied water to Mumbai for over 100 years. The company also built the Brabourne Stadium in Mumbai and the Jawaharlal Nehru Stadium in Delhi . The Mumbai Central Railway station, was also built by them at a cost of ₹ 1.6 crore . The company was commended for completing the work within 21 months. In 1936, Shapoorji Pallonji bought F.E. Dinshaw and Co. after
429-625: A small slice of many companies in a fund rather than owning shares in a conglomerate. Another example of a successful conglomerate is Warren Buffett 's Berkshire Hathaway , a holding company which used surplus capital from its insurance subsidiaries to invest in businesses across a variety of industries. The end of the First World War caused a brief economic crisis in Weimar Germany , permitting entrepreneurs to buy businesses at rock-bottom prices. The most successful, Hugo Stinnes , established
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#1732858825739468-402: Is a type of multi-industry company that consists of several different and unrelated business entities that operate in various industries. 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
507-532: Is an Indian multinational home appliances company based in Mumbai . It makes water purification devices, vacuum cleaners, air purification systems, and home security products. Eureka Forbes was founded in 1982 as a 60:40 joint venture between Tata Group 's Forbes & Company and Swedish manufacturer Electrolux . In 2001, Tata Group sold Forbes & Company to Shapoorji Pallonji Group and, four years later, Electrolux sold its 40% stake in Eureka Forbes to Forbes & Company. In 2010, Eureka Forbes acquired
546-472: Is currently China's largest civilian-run conglomerate by revenue. In South Korea , the chaebol is a type of conglomerate owned and operated by a family. A chaebol is also inheritable, as most of the current presidents of chaebols succeeded their fathers or grandfathers. Some of the largest and most well-known Korean chaebols are Samsung , LG , Hyundai Kia and SK . In India, family-owned enterprises became some of Asia's largest conglomerates, such as
585-555: The Aditya Birla Group , Tata Group , Emami , Kirloskar Group , Larsen & Toubro , Mahindra Group , Bajaj Group , ITC Limited , Essar Group , Reliance Industries , Adani Group and the Bharti Enterprises . In Brazil the most important conglomerates are J&F Investimentos , Odebrecht , Itaúsa , Camargo Corrêa , Votorantim Group , Andrade Gutierrez , and Queiroz Galvão. In New Zealand, Fletcher Challenge
624-641: 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
663-572: The highest value business transactions of all time. These conglomerates have strong ties with the government and preferential policies and access to capital. During the 1960s, the United States was caught up in a "conglomerate fad " which turned out to be a form of an economic bubble . Due to a combination of low interest rates and a repeating bear-bull market , conglomerates were able to buy smaller companies in leveraged buyouts (sometimes at temporarily deflated values). Famous examples from
702-440: The 1960s include Gulf and Western Industries , Ling-Temco-Vought , ITT Corporation , Litton Industries , Textron , and Teledyne . The trick was to look for acquisition targets with solid earnings and much lower price–earnings ratios than the acquirer. The conglomerate would make a tender offer to the target's shareholders at a princely premium to the target's current stock price. Upon obtaining shareholder approval,
741-618: The 1980s, General Electric also moved into financing and financial services , which in 2005 accounted for about 45% of the company's net earnings. GE formerly owned a minority interest in NBCUniversal , which owns the NBC television network and several other cable networks . United Technologies was also a successful conglomerate until it was dismantled in the late 2010s. With the spread of mutual funds (especially index funds since 1976), investors could more easily obtain diversification by owning
780-936: The Group launched its first affordable housing brand, Joyville Homes . Shapoorji Pallonji Group began a series of divestments to reduce its debt, starting with the initial public offering of Sterling & Wilson Solar in 2019. In 2021–2022, Shapoorji Pallonji Group demerged Eureka Forbes from Forbes & Company Ltd and sold its entire stake in Eureka Forbes to Advent International . By 2024, Shapoorji Pallonji's stake in Sterling & Wilson Solar had reduced to 6.95% from 65.77% in 2019. In 2023, Shapoorji Pallonji Group sold PNP Port in Raigad district to JSW Group . In 2024, Shapoorji Pallonji Group sold its controlling stake in Gopalpur port to Adani Ports & SEZ . The Shapoorji Pallonji has also had
819-598: The United States, some of the examples are The Walt Disney Company , Warner Bros. Discovery and The Trump Organization (see below). In Canada, one of the examples is Hudson's Bay Company . Another such conglomerate is J.D. Irving, Limited , which controls a large portion of the economic activities as well as media in the Province of New Brunswick . Some cite the decreased cost of conglomerate stock (a phenomenon known as conglomerate discount ) as evidential of these disadvantages, while other traders believe this tendency to be
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#1732858825739858-609: The company has built Al Alam Palace for the Sultan of Oman in 1972. Other notable projects include The Imperial in Mumbai, Jumeirah Lake Towers in Dubai and Ebene Cyber City in Mauritius. The company was founded as a partnership firm Littlewood Pallonji in 1865. The first project was the construction of a pavement on the Girgaum Chowpatty , followed by being part of the construction of
897-455: The conglomerate usually settled the transaction in something other than cash, like debentures , bonds , warrants or convertible debentures (issuing the latter two would effectively dilute its shareholders down the road, but many shareholders at the time were not thinking that far ahead). The conglomerate would then add the target's earnings to its earnings, thereby increasing the conglomerate's overall earnings per share . In finance jargon,
936-574: The death of its promoter. F.E. Dinshaw was an established finance firm that had high-profile dealings such as arranging a loan from the Maharaja of Gwalior for Tata Steel (then TISCO) in 1924 and merging local cement companies to form ACC Cement in 1936. F.E. Dinshaw and Co. also had a 12.5% stake in Tata Sons , which came to Shapoorji Pallonji. Shapoorji Pallonji's stake in Tata Sons increased to 18.37% after
975-462: The end came in January 1968, when Litton shocked Wall Street by announcing a quarterly profit of only 21 cents per share, versus 63 cents for the previous year's quarter. This was "just a decline in earnings of about 19 percent", not an actual loss or a corporate scandal, and "yet the stock was crushed, plummeting from $ 90 to $ 53". It would take two more years before it was clear that the conglomerate fad
1014-751: The examples are Adamjee Group , Dawood Hercules , House of Habib , Lakson Group and Nishat Group . In the Philippines , the largest conglomerate of the country is the Ayala Corporation which focuses on malls , bank , real estate development , and telecommunications . The other big conglomerates in the Philippines included JG Summit Holdings , Lopez Holdings Corporation , ABS-CBN Corporation , GMA Network, Inc. , MediaQuest Holdings , TV5 Network, Inc. , SM Investments Corporation , Metro Pacific Investments Corporation , and San Miguel Corporation . In
1053-714: The headquarters of corporations to mergers, in which independent ventures were reduced to subsidiaries of conglomerates based in New York or Los Angeles. Pittsburgh, for example, lost about a dozen. The terror instilled by the mere prospect of such harsh consequences for executives and their home cities meant that fending off takeovers, real or imagined, was a constant distraction for executives at all corporations seen as choice acquisition targets during this era. The chain reaction of rapid growth through acquisitions could not last forever. When interest rates rose to offset rising inflation, conglomerate profits began to fall. The beginning of
1092-748: The latter's rights issue in 1996. In 2001–02, Shapoorji Pallonji took over Forbes Gokak (now Forbes & Company Ltd ) from the Tata Group after winning a takeover battle with the Pawankumar Sanwarmal Group. In recent years, it has built the Barakhamba Underground Station in Delhi and Providence Stadium in Guyana . After the 2008 Mumbai attacks , the company was involved in the repairs and renovation of Taj Mahal Palace & Tower that
1131-503: The most powerful private economic conglomerate in 1920s Europe – Stinnes Enterprises – which embraced sectors as diverse as manufacturing, mining, shipbuilding, hotels, newspapers, and other enterprises. The best-known British conglomerate was Hanson plc . It followed a rather different timescale than the U.S. examples mentioned above, as it was founded in 1964 and ceased to be a conglomerate when it split itself into four separate listed companies between 1995 and 1997. In Hong Kong, some of
1170-652: The new businesses they had recently purchased, and by the mid-1970s most conglomerates had been reduced to shells. The conglomerate fad was subsequently replaced by newer ideas like focusing on a company's core competency and unlocking shareholder value (which often translate into spin-offs ). In other cases, conglomerates are formed for genuine interests of diversification rather than manipulation of paper return on investment. Companies with this orientation would only make acquisitions or start new branches in other sectors when they believed this would increase profitability or stability by sharing risks. Flush with cash during
1209-714: The production of electronics such as televisions. While not a keiretsu, Sony is an example of a modern Japanese conglomerate with operations in consumer electronics , video games , the music industry , television and film production and distribution , financial services , and telecommunications . In China, many of the country's conglomerates are state-owned enterprises , but there is a substantial number of private conglomerates. Notable conglomerates include BYD , CIMC , China Merchants Bank , Huawei , JXD , Meizu , Ping An Insurance , TCL , Tencent , TP-Link , ZTE , Legend Holdings , Dalian Wanda Group , China Poly Group , Beijing Enterprises , and Fosun International . Fosun
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1248-641: The succession of his son, Shapoor Mistry . Shapoorji Pallonji is regarded as "one of India's most valuable private enterprises". The Shapoorji Pallonji Group has three listed companies– Afcons Infrastructure , Forbes & Company Ltd , and Gokak Textiles. The company is known for building some of Mumbai's landmarks around the Fort area , including the Hong Kong Bank , Grindlays Bank , Standard Chartered Bank and Reserve Bank of India building, Bombay Stock Exchange building and Taj Intercontinental. Apart from these,
1287-406: The transaction was " accretive to earnings." The relatively lax accounting standards of the time meant that accountants were often able to get away with creative mathematics in calculating the conglomerate's post-acquisition consolidated earnings numbers. In turn, the price of the conglomerate's stock would go up, thereby re-establishing its previous price-earnings ratio, and then it could repeat
1326-425: The well-known conglomerates include Jardine Matheson (AD1824), Swire Group (AD1816), (British companies, one Scottish one English; companies that have a history of over 150 years and have business interests that span across four continents with a focus in Asia.) C K Hutchison Whampoa (now CK Hutchison Holdings ), Sino Group , (both Asian-owned companies specialize business such as real estate and hospitality with
1365-663: The whole process with a new target. In plain English, conglomerates were using rapid acquisitions to create the illusion of rapid growth. In 1968, the peak year of the conglomerate fad, U.S. corporations completed a record number of mergers: approximately 4,500. In that year, at least 26 of the country's 500 largest corporations were acquired, of which 12 had assets above $ 250 million. All this complex company reorganization had very real consequences for people who worked for companies that were either acquired by conglomerates or were seen as likely to be acquired by them. Acquisitions were
1404-462: Was formed in 1981 from the merger of Fletcher Holdings , Challenge Corporation, and Tasman Pulp & Paper, in an attempt to create a New Zealand-based multi-national company. At the time, the newly merged company dealt in construction, building supplies, pulp and paper mills, forestry, and oil & gas. Following a series of bungled investments, the company demerged in the early 2000s to concentrate on building and construction. In Pakistan , some of
1443-589: Was founded. It is a registered public charitable organization that creates and supports social initiatives. Eureka Forbes in association with National Society for Equal Opportunities for the Handicapped NASEOH launched EuroAble, a call center manned by people with special needs. It is also involved with 'Nana Nani Parks', which provides recreational facilities for senior citizens, and has worked with World Vision to provide water filter units for free drinking water kiosks in public places. They also have initiated
1482-487: Was on its way out. The stock market eventually figured out that the conglomerates' bloated and inefficient businesses were as cyclical as any others—indeed, it was that cyclical nature that had caused such businesses to be such undervalued acquisition targets in the first place —and their descent put "the lie to the claim that diversification allowed them to ride out a downturn." A major selloff of conglomerate shares ensued. To keep going, many conglomerates were forced to shed
1521-586: Was severely damaged by the attack. In 2010, it built India's tallest building of the time, The Imperial , a residential tower in Mumbai. In 2012, Shapoor Mistry announced that the Group had plans to invest in a deep-sea port, an IT park, hydro electricity and construction of roads and night shelters for the poor in West Bengal . In 2012, Shapoorji Pallonji Ports Pvt Ltd was planning to build Simar Port in Gujarat with SPV name Simar Port Private Limited. In January 2016,
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