The announcement by Honeywell (ranked #456 in The Global 5000) that it is splitting into three companies might very well have marked the end of the era of conglomerates.

A few years back, GE went down a similar path and split itself up into three pieces. The main GE company (ranked #207) was a $122 billion firm at one point and is now in the $65-70 billion range.

Indeed conglomerates seem to be a thing of the past and GE was perhaps the best known of the bunch. Multiple businesses all bunched together under one parent name with sometimes odd initiatives to consolidate various functions but product management functions left to the individual entities.

Over the recent years, a more popular approach has been the holding company such as Warren Buffet’s Berkshire Hathaway (ranked #6) where the ownership is held by a parent but the operations are independent. It is a model that most private equity firms use. They don’t want to run operating companies – just benefit from them.

There has been some chatter online that Amazon (ranked #2) is a modern day conglomerate with main businesses in (a) online shopping (b) AWS web services and (c) media with Prime Video. They make a good case.

In some ways, companies in other countries like Japan with their typical keiretsu (like Mitsubishi) and chaebols in South Korea (LG) operate somewhat like a conglomerate with various entities connected and benefitting from family-friendly business arrangements.

It has been interesting to watch the evolution and trends – and we’re probably not done evolving yet.

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