Claim: Sony is a name of a company.

A conglomerate is the combination of two or more corporations engaged in entirely different businesses that fall under one corporate group , usually involving a parent company and many subsidiaries . Often , a conglomerate is a multi-industry company . Conglomerates are often large and multinational .   Conglomerates were popular in the 1960s due to a combination of low interest rates and a repeating bear/bull market , which allowed the conglomerates to buy companies in leveraged buyouts , sometimes at temporarily deflated values . Famous examples from the 1960s include Ling-Temco-Vought , ITT Corporation , Litton Industries , Textron , Teledyne . Because of low interest on the loans , the overall return on investment of the conglomerate appeared to grow . Also , the conglomerate had a better ability to borrow in the money market , or capital market , than the smaller firm at their community bank .   For many years this was enough to make the company 's stock price rise , as companies were often valued largely on their return on investment . The aggressive nature of the conglomerators themselves was enough to make many investors , who saw a `` powerful '' and seemingly unstoppable force in business , buy their stock . High stock prices allowed them to raise more loans , based on the value of their stock , and thereby buy even more companies . This led to a chain reaction , which allowed them to grow very rapidly .   However , all of this growth was somewhat illusory and when interest rates rose to offset inflation , conglomerate profits fell . Investors noticed that the companies inside the conglomerate were growing no faster than before they were purchased , whereas the rationale for buying a company was that `` synergies '' would provide efficiency . By the late 1960s they were shunned by the market , and a major sell-off of their shares ensued . To keep the companies going , many conglomerates were forced to shed the industries they had recently purchased , and by the mid-1970s most had been reduced to shells . The conglomerate fad was subsequently replaced by newer ideas like focusing on a company 's core competency .   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 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 . In some ways GE is the opposite of the `` typical '' 1960s conglomerate in that the company was not highly leveraged , and when interest rates went up they were able to turn this to their advantage . It was often less expensive to lease from GE than buy new equipment using loans . United Technologies has also proven to be a successful conglomerate .   With the spread of mutual funds -LRB- especially index funds since 1976 -RRB- , investors could more easily obtain diversification by owning 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 a variety of manufacturing and service businesses .