50-567: Wesfarmers Limited is an Australian conglomerate , headquartered in Perth , Western Australia. It has interests predominantly in Australia and New Zealand, operating in retail, chemical, fertiliser, industrial and safety products. With revenue of A$ 43.5 billion in the 2023 financial year, it is one of Australia's largest companies by revenue. Wesfarmers is also one of the largest private employers in Australia, with approximately 107,000 employees. Wesfarmers
100-429: 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
150-867: A 50% interest in investment house Gresham Partners plus interests in Gresham Private Equity Funds, 50% interest in Wespine, a plantation softwood sawmill in Dardanup and a 24% interest in BWP Trust which mainly owns Bunnings Warehouses tenanted by Bunnings Group Limited. On 16 June 2014, Wesfarmers completed the sale of its insurance broking and premium funding operations, including OAMPS Insurance Brokers in Australia, OAMPS UK, Crombie Lockwood in New Zealand, Lumley Finance and Monument Premium Financing to Arthur J. Gallagher & Co. On 30 June 2014, Wesfarmers completed
200-480: 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
250-540: 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
300-638: 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
350-439: A loss of A$ 1.96 billion. Australian Railroad Group began a joint venture with Genesee & Wyoming by the purchase of Westrail at the beginning of 2000. It was sold in 2006 to Babcock & Brown and Queensland Rail . In 2001, Wesfarmers became a freely-traded publicly listed company with open ownership. After becoming a public company, Wesfarmers diversified its interests by acquiring other businesses. This division
400-472: 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. Hilco Capital Hilco Capital
450-603: A meeting to discuss its intention to demerge Coles. The demerger was effective from 21 November 2018 with Wesfarmers retaining a 15% shareholding. During 2020 Wesfarmers reduced its equity in Coles to 4.9%. In April 2023, Wesfarmers sold off the last of its shares in Coles. Wesfarmers Resources owned and operated open-cut coal producing resources in Australia including the Curragh in Queensland. Wesfarmers divested its coal business, completing
500-573: A restructure of its department store businesses into a single division named Department Stores, with each brand (originally Kmart and Target) continuing to operate independently. The division was later renamed Kmart Group . In August 2019, Catch Group, operator of the online shopping website catch.com.au, was acquired by Wesfarmers and included in the group. Kmart is a discount department store retailer in Australia and New Zealand. Kmart has more than 300 stores around Australia and New Zealand, employing more than 42,000 staff. Kmart Tyre & Auto Service
550-1036: A single, new Industrials division. Wesfarmers Chemicals, Energy & Fertilisers (WesCEF) produces and markets chemicals, fertilisers and gas products. WesCEF has ammonia and ammonium nitrate production facilities in Western Australia, 50% of QNP ammonium nitrate production facilities in Queensland, sodium cyanide production facilities in Western Australia, PVC resin and specialty chemicals production facilities in Victoria, LPG and LNG distribution across Australia with LPG and LNG production facilities in Western Australia and fertiliser production and importation facilities in Western Australia. WesCEF employs more than 1,200 staff. WesCEF businesses include CSBP , Australian Vinyls, AGR, QNP, Evol LNG, Kleenheat and Modwood. Wesfarmers Industrial and Safety provides industrial and safety products and services in Australia and New Zealand. On 1 December 2014, Wesfamers Industrial and Safety completed
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#1732884296914600-625: 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
650-527: Is a British financial investment and restructuring advisory company, operating in the UK, Western Europe, Canada and Australia. Hilco Capital was founded in London in 2000 as a joint venture between its management team and Hilco Global. Hilco has been involved with these companies, and in some cases owning and operating them for a period of time: Hilco Capital was awarded Special Situations Debt Provider of
700-402: 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
750-472: 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
800-584: Is made up of Bunnings Warehouse , a retailer of home improvement and outdoor living products, servicing home and commercial customers in Australia and New Zealand, and Officeworks , a retailer and supplier of office products for home, business and education in Australia. There are 210 Bunnings "warehouse" (larger) stores, 67 Bunnings small-format stores, 36 Bunnings Trade centres and 171 Officeworks stores. Bunnings employs more than 33,000 staff and Officeworks employs more than 8,000 staff. In January 2016, Home Retail Group accepted an offer from Wesfarmers to acquire
850-631: Is no longer a part of Kmart after parent Wesfarmers sold the auto division to German company Continental AG . Kmart Tyre and Auto has since been rebranded by Continental AG to MyCar. Target is a mid-level department store retailer in Australia. Target employs more than 12,000 staff. Target Australia has no connection to the American retailer of the same name . In August 2015, Wesfarmers announced an organisational restructure to cluster its three industrial businesses, Chemicals, Energy & Fertilisers (WesCEF); Resources; and Industrial and Safety (WIS) into
900-555: 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
950-687: The Perth central business district . In the 1940s there were premises at 563-571 Wellington Street . It also had premises in Newman Street in Fremantle . In 1949, Wesfarmers acquired Ashburton Transport, which at the time was lossmaking. The following year it also acquired its major competitor Gascoyne Trading , combining the operations of the two companies to supply the northwest of Western Australia. Along with wool and mail, it carted bananas from Carnarvon to Perth, returning with stores and mail from Perth. Gascoyne Trading introduced refrigerated transport to
1000-641: 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
1050-572: 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
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#17328842969141100-440: 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,
1150-618: 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
1200-659: The British home improvement retailer and garden centre Homebase . Stores in the United Kingdom and Ireland began to be rebranded as Bunnings following the takeover. However, following Wesfarmer's sale of Homebase to Hilco in May 2018, it was reported that the 24 stores already converted would return to the "Homebase" branding. In 2019, Officeworks group acquired Geeks2U, an Australian provider of on-site information, communication and technology services. In February 2016, Wesfarmers announced
1250-598: 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
1300-658: The acquisition of the Workwear Group of Pacific Brands Limited . Its businesses now include Blackwoods, Greencap, Bullivants, Coregas, Blackwoods Protector, Safety Source, Total Fasteners, Packaging House, King Gee, Hard Yakka, Stubbies and GotStock. The division's 32 New Zealand stores are now all branded as NZ Safety Blackwoods. These include former Blackwood and Packaging House stores, and 19 former Paykel Engineering Supplies purchased in 2003. Wesfarmers acquired Australian Pharmaceutical Industries (API) in March 2022. API would form
1350-813: The basis of a new healthcare division of Wesfarmers and a base from which to invest and develop capabilities in the health and wellbeing sector. In June 2023, Wesfarmers reached an agreement to buy InstantScripts for $ 135 million. Wesfarmers has 100% interest in many other subsidiaries across Australia, New Zealand, India, New Caledonia, United Kingdom, Hong Kong, Indonesia, China, Bermuda and Singapore. These include BBC Hardware , Coles Ansett Travel, Coles Group Superannuation Fund, Coles Property Management, Comnet, Fosseys , Grocery Holdings Pty Ltd, Harris Technology, Howard Smith , Katies Fashions, Loyalty Pacific, Masters Home Improvement New Zealand, Morley Shopping Centre, now.com.au, Theo's Liquor, Tooronga Shopping Centre, Tyremaster, Viking Direct and World 4 Kids. Wesfarmers has
1400-455: 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,
1450-462: 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
1500-751: 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
1550-699: The headquarters of corporations to mergers, where 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
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1600-503: 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
1650-653: 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 translates 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
1700-532: The process with the sale of its 40 per cent interest in the Bengalla Joint Venture to New Hope Corporation for $ 860 million on 3 December 2018. In 1950 Wesfarmers purchased the Gascoyne Trading Company (GTC), growing it to become the largest transport operator in Western Australia. Until 1971 it held the sole rights for direct road transport between Carnarvon and Perth. In 1973 a joint venture
1750-714: 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
1800-548: The provision of services and merchandise to the Western Australian rural community. By 1919, more than 65 local co-operative companies were acting as agents for Westralian Farmers Limited. In 1924, it established the first public radio station in Western Australia with 6WF , before it passed into the hands of the Australian Broadcasting Commission in 1929, now called ABC Radio Perth The organisation
1850-545: The region and three trailer road trains that now carry loads up to 115 tonnes. In 1984, Westralian Farmers Co-operative Limited formed Wesfarmers Limited, restructuring from a co-operative to a public company and listed on the Australian Securities Exchange on 15 November 1984. Initially the Co-operative retained 60% of the ordinary shares, guaranteeing that the co-op's farmer members retained control, and
1900-479: The rest was distributed to its members. In 1991, 19 m of the records of Westralian Farmers Co-operative were deposited with the J S Battye Library in Perth. Bought in January 1993 the integration of Dalgety Farmers with Wesfarmers proved more difficult than expected. For a time the merged rural agency and merchandise business was Wesfarmers Dalgety until renamed Wesfarmers Landmark in March 2001 after IAMA Limited
1950-631: The retailer in April. Coles is a national supermarket, department store. liquor, fuel and convenience retailer in Australia. As of September 2013, Coles operated 756 full-service supermarkets, 810 liquor outlets, 92 hotels, and 636 fuel and convenience stores. Wesfarmers bought Kmart and Target when they bought Coles. Coles employs more than 105,000 staff. Coles' businesses include Coles Supermarkets , Coles Online , Coles Express , Vintage Cellars , 1st Choice Liquor Superstore , BI-LO , Coles Financial Services and Liquorland . On 16 March 2018, Wesfarmers held
2000-676: The sale of its insurance underwriting operations, including the WFI and Lumley brands, to the Insurance Australia Group . On 2 July 2007, Wesfarmers announced it was purchasing the Coles Group retail business for $ 22 billion making it the largest successful take-over in Australian corporate history. Wesfarmers took control of Coles on 23 November 2007, after paying almost $ 20 billion for the company. Wesfarmers had already purchased 13 per cent of
2050-406: 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
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2100-425: 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
2150-663: 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
2200-679: Was brought in. Landmark, Wesfarmers foundation business, was sold to AWB Limited (originally the Australia Wheat Board) in August 2003. An initial investment in 10 percent of Bunnings in February 1987 reached full ownership in January 1994. Bunnings bought UK retailer Homebase in February 2016 and Britain's first Bunnings store opened twelve months later in February 2017. They were 265 well-located stores and Wesfarmers believed Bunnings' management would greatly improve their modest profits. The plan
2250-462: 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
2300-513: Was formed with Downard to enter the interstate freight forwarding market between Western Australia and Victoria . In 1985, GTC purchased a 50% shareholding in Total West from Mayne Nickless . In 1996, after taking full ownership of Total West, Wesfarmers merged it with GTC to form Wesfarmers Transport. In 2001 the business was sold to Toll Holdings . Conglomerate (company) A conglomerate ( / k ə ŋ ˈ ɡ l ɒ m ə r ə t / )
2350-562: Was founded in 1914 as a co-operative to provide services and merchandise to Western Australian farmers. It was listed on the Australian Securities Exchange in 1984 and grew into a major retail conglomerate. Westralian Farmers Co‐operative Limited was formed in 1914 as a cooperative company by the Farmers' and Settlers' Association of Western Australia , to acquire the assets of the West Australian Producers' Union, to be focused on
2400-516: Was linked with the activities of the Co-operative Federation of Western Australia . By the 1940s, the company's business included "being wheat and general merchants; country distribution for Commonwealth Oil Refineries ; wool, livestock, skin and produce auctioneers; grain & fruit exporters; insurance underwriters; acquiring agents for the wheat pool of W.A." Known as Westralian Farmers Limited, it had premises in various locations within
2450-487: 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
2500-461: Was to make changes gently but tactics changed and local management, perceived as under-performing, was removed and replaced by expatriate management. The expatriate management's changes alienated the existing customer base and, aided by a poor retailing climate, brought a rapid decline into losses. A strategic review by Wesfarmers resulted in the May 2018 sale of the Homebase business to Hilco Capital at
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