DEFINITION of 'Conglomeration'

The process by which a conglomerate is created, as when a parent company begins to acquire subsidiaries. Sometimes conglomeration can refer to a time period when many conglomerates are formed simultaneously. One of the chief advantages of conglomeration is the immunity that it provides the parent company from potential takeovers.

BREAKING DOWN 'Conglomeration'

Conglomeration became an increasingly common and popular process in the 1950s, because it is a convenient way for parent companies to operate several related or complementary firms in conjunction with each other. But conglomeration also provides an avenue for parent firms to diversify into other lines of business.

RELATED TERMS
  1. Conglomerate

    A company that owns controlling stake in a number of smaller ...
  2. Conglomerate Discount

    A reference to the tendency of the stock market to undervalue ...
  3. Conglomerate Boom

    A rapid growth in the number of conglomerates, or big corporations ...
  4. Conglomerate Merger

    A merger between firms that are involved in totally unrelated ...
  5. Conglomerates Sector

    A category of stocks of large corporations with diverse and often ...
  6. Parent Company

    A company that controls other companies by owning an influential ...
Related Articles
  1. Small Business

    What's a Conglomerate?

    A conglomerate is a corporation that’s comprised of several different independent businesses.
  2. Insights

    Conglomerates: Cash Cows Or Corporate Chaos?

    Huge companies may not be as infallible as previously assumed. Find out why bigger isn't always better.
  3. Insights

    Conglomerates: Risky Proposition?

    Investing in a corporate giant may not be as safe as you think.
  4. Insights

    5 Conglomerates with Exposure to the Caribbean

    These five well-diversified conglomerates play a major role in the economies of the Caribbean.
  5. Financial Advisor

    7 Essential Questions To Ask Aging Parents About Their Finances

    No one wants to think about the aging of his or her parents, let alone plan for their death. Unfortunately, aging is a part of life, and in order to truly support your parents, it's best to start ...
  6. Financial Advisor

    Helping Aging Parents Manage Their Money

    Old age can make dealing with finances difficult. Find out how you can help aging parents manage their finances and estates.
  7. Retirement

    The Booby-trapped World of Parental College Loans

    Private parent loans can help families pay for college. But the repayment timeline associated with the loans can hurt parents’ retirement savings.
  8. Financial Advisor

    Top Financial Planning Issues for Older Parents

    Clients who have children later in life present an opportunity for advisors. Here are the key the financial planning issues that need to be addressed.
  9. Small Business

    What's a Subsidiary?

    A subsidiary is a corporation owned 50% or more by another corporation. The owning corporation is usually called the parent or holding company. A company that is 100% owned and controlled by ...
  10. Financial Advisor

    How to Protect Your Parents from Financial Fraud

    How do you protect your parents from being victims of financial fraud before it happens? Here are some tips to help you minimize the risk.
RELATED FAQS
  1. Why would a company have a subsidiary in a different sector from its main source ...

    Understand why a company would want to own a subsidiary in a different sector from its main source of business. Learn what ... Read Answer >>
  2. What is the difference between a subsidiary and a sister company?

    Discover the differences between subsidiary companies and sister companies, and understand how both are related to parent ... Read Answer >>
  3. What are the differences between affiliate, associate and subsidiary companies?

    All three of these terms refer to the degree of ownership that a parent company holds in another company. In most cases, ... Read Answer >>
  4. What is the difference between a subsidiary and a wholly owned subsidiary?

    Understand the primary differences between a subsidiary company and a wholly owned subsidiary, and their relationship to ... Read Answer >>
  5. How is taxation treated for both the parent and subsidiary company during a spinoff?

    Learn how the potential tax implications of a spinoff can affect both parent and subsidiary companies and how taxes may be ... Read Answer >>
  6. Are domestic and foreign subsidiaries included on a company's financial statements?

    A subsidiary is a company that is controlled by another 'parent' company. The subsidiary acts and operates like its own entity ... Read Answer >>
Hot Definitions
  1. Federal Direct Loan Program

    A program that provides low-interest loans to postsecondary students and their parents. The William D. Ford Federal Direct ...
  2. Cash Flow

    The net amount of cash and cash-equivalents moving into and out of a business. Positive cash flow indicates that a company's ...
  3. PLUS Loan

    A low-cost student loan offered to parents of students currently enrolled in post-secondary education. With a PLUS Loan, ...
  4. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  5. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  6. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
Trading Center