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  • - [Narrator] In November, Johnson & Johnson,

  • and General Electric both announced

  • that they are splitting up.

  • Johnson & Johnson will break

  • into two separate public companies,

  • one focused on consumer health products

  • and the other on pharmaceuticals.

  • And GE will split into three companies,

  • centered on healthcare, power and aviation.

  • The splintering of these two heavyweights

  • is just the latest in a number

  • of big corporate breakups,

  • even as tech companies continue to consolidate.

  • - A lot of people are saying

  • that this may be the end or the death

  • of the corporate conglomerate as we've know it.

  • - [Narrator] Here's what led to the latest wave

  • of breakups, and what they could mean

  • for legions of shareholders

  • with a stake in these industry titans.

  • The breakup of conglomerates isn't a new phenomenon.

  • - The rationale for industrial conglomerates

  • in the first place was efficiency.

  • - [Narrator] Jason Zweig has been covering investing

  • and financial history for The Wall Street Journal

  • for over a decade.

  • He says the conglomerate model tended

  • to work for a while until the market got overheated.

  • - It stopped working

  • and people learned that these businesses rise

  • and fall together.

  • One of the things that happened in the 1980s

  • is that we had the rise of the leveraged buyout movement,

  • which today we would call private equity.

  • And so large funds were able

  • to get access to relatively cheap money,

  • which they could use to buy undervalued assets.

  • So a lot of conglomerates chose that particular time

  • to split up.

  • - [Narrator] Conglomerates continued

  • to decline in popularity in the 1990s and 2000s.

  • And then in 2008, this happened.

  • - [Reporter] The Dow tumbled more than 500 points

  • after two pillars of the street tumbled over the weekend.

  • - [Narrator] The 2008 financial crisis

  • marked a new shift for some

  • of the remaining industrial conglomerates.

  • Investors led a push to break up bigger companies

  • when the individual units seemed

  • to be underperforming independent rivals.

  • For example, Siemens,

  • the German multinational technology giant saw

  • its stock plunge more than 60%.

  • Under pressure from investors,

  • it shed its healthcare and energy businesses,

  • shifting from a conglomerate into a company focused

  • on higher margin software and technology.

  • This strategy worked.

  • Since then, Siemens' market capitalization

  • has surpassed its rival GE.

  • For years, GE, one of America's oldest industrial giants

  • had been struggling.

  • - The company was engaging in some aggressive accounting

  • in the late '90s

  • and into the beginning of the 2000s

  • that led to problems down the road.

  • GE Capital, its financial arm,

  • was taking risks that really did not pan out

  • during the financial crisis.

  • - [Narrator] And like Siemens,

  • GE faced pressure, both internally and externally

  • to split after parts of its business continued

  • to perform poorly.

  • - Certainly management was under enormous pressure

  • internally to do something.

  • Meanwhile, they were under enormous pressure

  • from activists, institutional investors.

  • - [Narrator] In the early 2000s,

  • GE began selling off portions of its business,

  • from insurance and appliances

  • to NBC Universal.

  • - General Electric is selling NBC Universal

  • to the cable TV giant Comcast.

  • - [Narrator] And its majority stake in oil and gas.

  • And on November 9th, 2021,

  • the company announced it would break up

  • its last three parts,

  • marking the end of an era for the industrial titan.

  • This was just days before Johnson & Johnson,

  • the world's largest health products company by sales

  • announced plans to break up as well

  • but it had different reasons.

  • Johnson & Johnson's CEO said the company decided

  • to split because the businesses,

  • customers and markets have diverged so much

  • in recent years,

  • a pattern that accelerated during the pandemic.

  • - I think they just reached the point

  • where like GE, they felt they could be more efficient

  • and each unit could get the full attention it deserved

  • if they split apart.

  • - [Narrator] Zweig says that when conglomerates split,

  • it's often due to external pressure.

  • - When things start to go wrong,

  • what people say is you could realize the value

  • that's locked up in these parts of the company.

  • So people will go from viewing it

  • as a unified whole

  • to viewing it as a set

  • of pieces that would do better

  • when they were broken off from the whole.

  • And that applies to institutional investors,

  • individual investors, competitors.

  • - [Narrator] An executive at Johnson & Johnson said

  • it will be in a better position standing alone

  • to make decisions and allocate resources.

  • So what do big corporate breakups mean for shareholders?

  • - Over the long run,

  • split ups do tend to create value

  • for investors in the surviving companies.

  • Now, whether it'll be true

  • in these particular cases is very difficult to say.

  • - [Narrator] For Johnson & Johnson,

  • investors can expect the second company

  • will have a new name

  • and the legacy business will continue to go by J&J.

  • For GE, current shareholders are likely

  • to receive shares of the new energy

  • and healthcare companies as dividends

  • when they spin off.

  • While the original company that remains

  • will focus on aviation.

  • - This may be the end

  • or it might just be the end of the beginning

  • but it's likely that we will see more

  • of these breakups.

  • - [Narrator] For many non-tech companies,

  • the future is looking smaller

  • and more specialized

  • but what it means for investors is yet to be seen.

  • (playful music)

- [Narrator] In November, Johnson & Johnson,

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為什麼集團企業要分家?(Why Conglomerates Split Up | WSJ)

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    Kelly Lin 發佈於 2022 年 09 月 14 日
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