54-431: Beatrice Foods Company was a major American food conglomerate founded in 1894. One of the best-known food processing companies in the U.S., Beatrice owned many well-known brands such as Tropicana , Krispy Kreme , Jolly Rancher , Orville Redenbacher's , Swiss Miss , Peter Pan , Avis , Milk Duds , Samsonite , Playtex , La Choy and Dannon . In 1987, its international food operations were sold to Reginald Lewis ,
108-429: 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
162-403: A corporate attorney, creating TLC Beatrice International, after which the majority of its domestic (U.S.) brands and assets were acquired by Kohlberg Kravis Roberts , with the bulk of its holdings sold off. By 1990, the remaining operations were ultimately acquired by ConAgra Foods . The Beatrice Creamery Company was founded in 1894 by George Everett Haskell and William W. Bosworth, by leasing
216-402: A debt load on Beatrice, which hurt Beatrice's credit rating and therefore deflated the value of Beatrice stock . 1985, Beatrice sold their Beatrice Chemical division to Imperial Chemical Industries . Stahl Finish, Paule Chemical, Polyvinyl Chemical Industries, Converters Ink Company, and Thoro System Products were the business units that formed Beatrice Chemical. Other divisions sold to pay off
270-486: 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
324-505: A far-reaching multinational corporation. One commercial also mispronounced the name of the founding city. The campaign was pulled off the air by autumn. At the 87th annual Beatrice shareholders’ meeting on June 5, 1984, stockholders of record were asked to change the name of the company. "Recognizing this clear departure from the past, we are proposing a new name for the company. At our annual meeting in June, stockholders will be asked to change
378-549: 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
432-638: 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
486-1006: A group of Company executives, together with Drexel Burnham Lambert bought International Playtex, Inc. in a leveraged buyout and named the newly private organization Playtex Holdings . Playtex included such former Esmark brands as Max Factor , Playtex Living Gloves , Playtex Products , Almay , Jhirmack , and Halston/Orlane . The Beatrice Dairy Products subsidiary, which included the brands of Meadow Gold , Hotel Bar Butter , Keller's Butter , Mountain High Yogurt , and Viva Milk Products , to Borden, Inc. in December 1986 for $ 315,000,000. Other divisions sold in 1986 included Americold and Danskin . Brands like Samsonite , Culligan , Stiffel Lamps , del mar window coverings , Louver Drape window coverings , Aristokraft kitchen cabinets, Day-Timer planner, Waterloo Industries tool boxes, Aunt Nellies and Martha White were merged into
540-508: 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. Wallace Rasmussen Too Many Requests If you report this error to
594-416: A more diverse array of food and consumer products. It became the owner of brands such as Avis Car Rental , Playtex , Shedd's , Tropicana , John Sexton & Co , Good & Plenty , and many others. Annual sales in 1984 were roughly $ 12 billion. Beatrice's Canadian subsidiary, Beatrice Foods Canada , was founded in 1969 and became legally separate from its parent firm in 1978. In 1968, Sexton Foods
SECTION 10
#1732782508376648-580: A new Sexton frozen product line, and pledged that the Sexton leadership would continue to lead and operate the company as a separate entity. On December 20, 1968, Beatrice acquired the business and assets of John Sexton & Co., exchanging about 375,000 shares of Beatrice's preferred convertible preference stock valued at $ 37,500,000. John Sexton & Co. became an independent division of Beatrice Foods, led by Mack Sexton (son of Franklin), William Egan (son of Helen), and William Sexton (son of Sherman). Mack became
702-402: A new entity called E-II Holdings , which was later purchased by American Brands for 1.14 billion. E-II was created in June, 1987, as an umbrella company for several non-food and specialty food businesses of Beatrice. Meshulam Riklis bought E-II from American Brands in 1988; American Brands bought back Aristokraft, Day-Timer, Waterloo, Twentieth Century and Vogel Peterson. Tropicana Products
756-639: 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
810-519: A vice president of Beatrice and a Beatrice board member. John Sexton & Co. put Beatrice Foods into the wholesale grocery business and Beatrice put John Sexton & Co. into the frozen foods business. Beatrice's and the Sexton's leadership were interested in maximizing the investment in John Sexton & Co. by growing the company. Wallace Rasmussen was the chairman and CEO of Beatrice Foods from 1976 until 1980, retiring after 47 years with
864-402: 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
918-472: 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
972-571: 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
1026-651: The Great Plains . In 1913 the company moved to Chicago , the center of the American food processing industry. By the 1930s, it was a major dairy company, producing some 30 million US gallons (110,000,000 L) of milk and 10 million US gallons (38,000,000 L) of ice cream annually. In 1939, Beatrice Creamery Company purchased Blue Valley Creamery Company , the other Chicago-based dairy centralizer. This acquisition added at least 11 creameries from New York to South Dakota. Beatrice's 'Meadow Gold' brand
1080-652: 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
1134-579: 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
SECTION 20
#17327825083761188-440: 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,
1242-627: 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
1296-469: The Olympics, advertisements for its products continued to end with the catchphrase "We're Beatrice" and an instrumental version of the "You've known us all along" portion of the jingle, as the red and white "Beatrice" logo would simultaneously appear in the bottom right hand corner. The campaign was found to alienate consumers, as it called attention to the fact that many of their favorite brands were part of
1350-603: 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
1404-631: The buyout of its founders and remained in business as one of Canada's largest food processing concerns. In 1997 Beatrice Foods Canada was acquired by Parmalat. At first, Parmalat dropped the Beatrice name from the company's products, but reinstated it in late 2005, while the Italian parent company was being investigated. Lactalis later acquired Parmalat and Beatrice Foods Canada is now a part of Lactalis Canada. Conglomerate (company) A conglomerate ( / k ə ŋ ˈ ɡ l ɒ m ə r ə t / )
1458-468: The company. During his tenure, Beatrice added several high-value acquisitions to its portfolio, most notably Tropicana Products, Inc . During both the 1984 Winter and Summer Olympics , the corporation flooded the TV airwaves with advertisements advising the public that many familiar brands were part of Beatrice Foods. These ads used the tagline (with a jingle) "We're Beatrice. You've known us all along." After
1512-455: 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,
1566-455: The debt from the Esmark purchase included Brillion Iron Works , World Dryer , STP , and Buckingham Wine (distributors of Cutty Sark whisky). In 1986, Beatrice became the target of leveraged buyout specialists Kohlberg Kravis Roberts (KKR) and they ultimately purchased the firm for $ 8.7 billion. At the time this was the largest leveraged buyout in history — and over the next four years it
1620-467: 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
1674-771: 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
Beatrice Foods - Misplaced Pages Continue
1728-540: The factory of a bankrupt firm of the same name located in Beatrice, Nebraska . At the time, they purchased butter, milk, and eggs from local farmers and graded them for resale. They promptly began separating the butter themselves at their plant, making their own butter on site and packaging and distributing it under their own label. They devised special protective packages and distributed them to grocery stores and restaurants in their own wagons and through jobbers. To overcome
1782-670: The first company to reach a billion dollars in sales, with a black man at its head. TLC Beatrice sold the Canadian operations; Beatrice Foods Canada, Ltd., in 1990 to Onyx, which later sold it to Parmalat in 1997. In 1987, KKR had formed a new entity, with similar intent as E-II Holdings, called Beatrice Company , which was specifically created to include Beatrice Cheese , Beatrice-Hunt/Wesson , and Swift-Eckrich . In 1990, KKR sold Beatrice Company to Conagra Brands . Most of Beatrice's brand names still exist, but under various other owners, as trademarks and product lines were sold separately to
1836-719: 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
1890-503: The highest bidder. Through the 1980s, Beatrice was a co-defendant alongside W.R. Grace and Company in a lawsuit alleging that the Riley Tannery, a division of Beatrice Foods, had dumped toxic waste which contaminated an underground aquifer that supplied drinking water to East Woburn, Massachusetts . The case became the subject of the popular book and film A Civil Action . Federal judge Walter Jay Skinner ruled that Beatrice
1944-413: The late 1980s, but was revived in 2007. The Beatrice of today goes by its 1984 name of Beatrice Companies, which was approved by the 1984 stockholder meeting. Beatrice Foods Canada is a Toronto, Ontario -based dairy unit of Parmalat Canada . The Canadian unit of Beatrice Foods was founded in 1969, and was separated from Beatrice Foods in 1978. Consequently, Beatrice's Canadian unit was not affected by
1998-503: 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
2052-459: The name to Beatrice Companies, Inc. from Beatrice Foods Co. This change is appropriate given the company's evolution and present composition. It reflects Beatrice's wide range of separate and distinct businesses, many with operations totally unrelated to food processing, yet retains the company's goodwill and reputation for quality products and services." Annual Report, February 29, 1984. In June 1984, Beatrice acquired Esmark . The Esmark acquisition
2106-652: 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
2160-558: The proceeds of their sales of cream. The program worked so well, the company sold more than 50,000 separators in Nebraska from 1895 to 1905. On March 1, 1905, the company was incorporated as the Beatrice Creamery Company of Iowa, with capital of $ 3,000,000. By the early 20th century, they were shipping dairy products across the United States , and by 1910 they operated nine creameries and three ice cream plants across
2214-714: 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
Beatrice Foods - Misplaced Pages Continue
2268-409: The shortage of cream, the partners established skimming stations to which farmers delivered their milk to have the cream, used to make butter, separated from the milk. This led to the introduction of their unique credit program of providing farmers with cream separators so they could separate the milk on the farm and retain the skim milk for animal food. This enabled farmers to pay for the separators from
2322-406: 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
2376-425: 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
2430-668: 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
2484-414: Was a household name in much of America by the beginning of World War II . In 1946, it changed its name to Beatrice Foods Co. Their sales doubled between 1945 and 1955, as the post-war baby boom created greater demand for milk products. From the late 1950s until the early 1970s, the company expanded into Canada and purchased a number of other food firms, leveraging its distribution network to profit from
2538-500: Was approached by Beatrice with an offer to purchase John Sexton & Co. Beatrice was attracted to Sexton Quality Foods' distribution network, quality, variety of private-label products, specialized food offerings, sales force and profitability. Mack Sexton's initial response was no, but Beatrice Foods was very interested. Eventually both parties reached an agreement. Beatrice Foods increased the purchase price, pledged capital to expand Sexton Quality Foods' distribution network and introduce
2592-498: Was expected to accelerate the attainment of Beatrice's marketing goals. The company also sought a higher public profile, adding their name to the end of their brands' television commercials, and sponsoring the Newman-Haas IndyCar and Haas Lola Formula One racing teams. Many analysts believe the Esmark acquisition, which was pushed by then Chairman, Chief Executive Officer and President James L. Dutt, put too much of
2646-462: 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
2700-667: Was not responsible for the contamination, although according to the book and film, based on new evidence brought forward by the EPA later found, Judge Skinner reversed his verdict and found both companies responsible. In the 1980s, the firm operated in South Africa during apartheid . As it was a private company, the campaign of divestment could not lower its stock price and thus had no impact on its business activities. The original Beatrice Companies (Beatrice Foods Co. before 1984, and Beatrice Creamery Company before 1946) went dormant in
2754-487: 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
SECTION 50
#17327825083762808-454: Was part of the company's strategy to focus Beatrice's assets in food and consumer products businesses. In addition to the Swift & Co. and Hunt-Wesson food brands, companies owned by Esmark included Avis Rent a Car , Playtex , Jensen Electronics , and STP . Because of Esmark's national brands, direct sales force, distribution network and research and development capabilities, its acquisition
2862-524: Was sold off, division by division. Beatrice's Coca-Cola bottling operations (acquired by Beatrice in 1981) were acquired by The Coca-Cola Company for $ 1 billion in 1986. They were shortly spun off as Coca-Cola Enterprises Beatrice Bottled Water Division (acquired with the Coca-Cola operations) with brands such as Arrowhead Drinking Water , Ozarka Drinking Water , and Great Bear Drinking Water were also sold to Perrier in 1987. In December 1986,
2916-482: Was sold to Seagram for $ 1.2 billion in 1988. All of the international operations were folded into a new entity called Beatrice International Holdings in 1987, which was later purchased that year through junk bond financing for $ 985 million by Reginald Lewis , a corporate attorney, creating TLC Beatrice International . TLC Beatrice International became the largest business in America owned by an African American and
#375624