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40-421: Steel Dynamics was founded in 1993 by three former executives of Nucor with $ 370 million in funding. It began production at its $ 275 million Butler, Indiana , flat roll mill in 1996 and reported its first annual profit in 1997. During the early 2000s recession , the company offered many incentive programs for employees to cut costs and improve standards and outperformed most other steel manufacturers. In 2007,

80-429: 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

120-871: 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 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

160-486: 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

200-549: 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

240-542: A nuclear industry services company was unsuccessful, and it followed the example of other companies in the 1950s and 60s by attempting to become a conglomerate , moving its headquarters to Phoenix, Arizona . It made several acquisitions, including the Vulcraft Corporation, a steel joist manufacturer located in Florence, South Carolina . Vulcraft was founded by Sanborn Chase, who died at an early age, leaving

280-639: 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

320-592: A usable tax loss, successfully challenged the liquidation in a proxy fight in September 1955 and forced REO to take over a tiny nuclear services company called Nuclear Consultants, Inc. in a reverse takeover . The company was renamed "Nuclear Corporation of America Inc." and relocated to offices in the Empire State Building in New York City . The organization's attempt to recast itself as

360-571: Is a 2,400-acre complex which is supposed to also house several other businesses who work with SDI in other cities. 3,000 jobs should be created when complete. In 2021, the company agreed to pay $ 475,000 and spend $ 3 million to upgrade air pollution control equipment to reduce air emissions at its facilities in Butler, Indiana to after allegations by the United States Environmental Protection Agency that

400-472: 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

440-627: Is the largest steel producer in the United States and the largest recycler of scrap in North America . Nucor is the 16th-largest steel producer in the world. Along with Commercial Metals Company , it is one of two primary suppliers of rebar used to reinforce concrete in buildings, bridges, roads, and infrastructure in the U.S. To supply its mills, Nucor uses electric arc furnaces and continuous casting to melt scrap steel as opposed to blast furnaces to melt iron . In 2023,

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480-571: 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

520-590: 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

560-579: 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

600-440: 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,

640-627: 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

680-603: 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

720-474: The company acquired The Techs, three hot-dip galvanization plants in Pittsburgh that coat flat-rolled steel, and OmniSource Corporation, a scrap metal processor and trader. In 2014, the company acquired Severstal Columbus for $ 1.625 billion. The acquisition increased the company's production capacity to 11 million tons. In 2016, the company acquired Vulcan Threaded Products for $ 126 million. In 2016,

760-579: The company began construction of a $ 100 million facility in Columbus, Mississippi . In 2017, the company began a $ 28 million expansion of its Roanoke Bar Division. In 2017, the company began a $ 75 million expansion of its Structural and Rail Division. In 2018, the company acquired the former Kentucky Electric Steel plant in Coalton, Kentucky . in 2020, production for the Sinton,TX facility commenced. It

800-651: The company moved its headquarters to Charlotte, North Carolina to be closer to its main Vulcraft plant in South Carolina. In 1968, unable to get favorable steel prices from American manufacturers and unhappy with the imported steel available at the time, Iverson, a metallurgist by training, extended Nucor vertically into steelmaking by building its first steel bar mill in Darlington, South Carolina . The company purchased an electric arc furnace , which

840-520: The company opened its building products division. In 1989, Nucor opened a facility in Crawfordsville, Indiana , the first mini mill in the world to produce flat rolled steel using thin-slab technology. In March 2000, a joint venture, owned 47.5% by Nucor, 47.5% by BlueScope , and 5% by IHI Corporation was formed to license Castrip technology. This technology allowed for continuous casting of sheet steel directly from molten steel without

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880-407: The company produced and sold approximately 18.5 million tons of steel and recycled 18.4 million tons of scrap. None of Nucor's mills are unionized and the corporate culture is opposed to trade unions . After REO Motor Car Company , founded by Ransom E. Olds , sold its operations and initiated liquidation proceedings, a group of dissident activist shareholders , noticing the existence of

920-549: The company signed an agreement with ExxonMobil for carbon capture and storage of up to 800,000 metric tons from its direct reduced iron plant in Convent, Louisiana . The plant had been criticized for its emissions. Conglomerate (company) A conglomerate ( / k ə ŋ ˈ ɡ l ɒ m ə r ə t / ) 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

960-477: The company to his widow. Nuclear purchased Vulcraft from Chase's widow in 1962 and hired F. Kenneth Iverson as general manager . In March 1965, the company again filed for bankruptcy. Iverson, head of the only profitable division, took over as head of the company due to lack of interest in the job from others. Iverson reorganized Nucor around its only profitable business, the steel fabricator Vulcraft. All other businesses were either sold or liquidated. In 1966,

1000-538: The company was violating the Clean Air Act of 1963 . The company was accused in a lawsuit of participating in a conspiracy with other steel manufacturers to restrict steel production in 2008. In October 2016, the company settled the case, agreeing to pay $ 4.6 million. Nucor Nucor Corporation is an American company based in Charlotte, North Carolina , that produces steel and related products. It

1040-455: 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,

1080-636: The emission of toxic chemicals into the air, water, and soil in Alabama , Arkansas , Indiana , Nebraska , South Carolina , Texas , and Utah . The settlement was "the largest and most comprehensive environmental settlement ever with a steel manufacturer." In 2016, the company unsuccessfully filed a lawsuit to block the Environmental Protection Agency from adopting a plan to control visible pollution in Arkansas . In 2023,

1120-467: 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

1160-771: 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

1200-719: 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

1240-503: 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

Steel Dynamics - Misplaced Pages Continue

1280-510: The need for heavy, expensive, and energy-consuming rollers. In 2000, Nucor agreed to spend $ 98 million, including $ 85 million for new air pollution control equipment, $ 4 million to monitor and reduce pollution in communities near its plants, and a $ 9 million civil fine to resolve allegations by the United States Department of Justice and the United States Environmental Protection Agency that it had not adequately controlled

1320-652: 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

1360-714: 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

1400-406: 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

1440-425: 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

1480-668: 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

1520-417: Was far cheaper than the traditional steel blast furnace , with a $ 6 million loan secured by all of the company's assets. Production delays and staffing problems resulted in losses, but earnings soared in 1971 and 1972. In 1972, the company, recognizing that it was now misnamed, adopted its current title, Nucor Corporation. That year, it became a public company via an initial public offering . In 1988,

1560-462: 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

1600-487: 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

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