The most diversified companies operating today are a short list dominated by Berkshire Hathaway, Siemens, Samsung, and Honeywell, each generating substantial revenue across industries that share little in common. Berkshire owns freight rail, insurance, candy, and paint. Siemens builds trains, medical scanners, and factory automation software. Samsung makes memory chips, smartphones, and washing machines. Honeywell supplies aerospace electronics and building climate systems. The list used to be longer. General Electric, Danaher, Johnson & Johnson, and 3M have all narrowed themselves in the past decade, and understanding why is as important as knowing who is still on the list.
What Counts as Highly Diversified
Diversification is a matter of degree, and the useful cutoff is whether any one segment dominates. One consulting study classified firms as “focused” when roughly 90% or more of revenue came from a single segment, and as diversified when revenue was spread more broadly.1Boston Consulting Group. For Long-Term Market Performance, Focus Beats Diversification In practice, investors look for companies where at least two or three segments each contribute meaningful revenue and where those segments serve genuinely different end markets. A software company with a small hardware line is not diversified in any real sense. A holding company whose insurance float funds a railroad is.
Berkshire Hathaway
Berkshire Hathaway is the textbook modern conglomerate. Its 2024 annual report shows wholly-owned businesses spanning insurance (GEICO, General Re, Berkshire Hathaway Reinsurance Group), freight rail (BNSF), energy generation and utilities (Berkshire Hathaway Energy), manufacturing (Precision Castparts, Duracell, Shaw Industries, and dozens more), retail and services (Pilot Travel Centers, Dairy Queen, See’s Candies), and distribution (McLane Company).2Berkshire Hathaway Inc. 2024 Annual Report On top of the operating businesses, the holding company maintains an enormous equity portfolio of publicly traded stakes.
No operational thread connects a candy company to a freight railroad. The logic is financial. The insurance operations generate a large float of investable capital, and the parent deploys that capital wherever it sees the best risk-adjusted returns. In 2024, Berkshire’s consolidated sales and service revenues exceeded $211 billion, with manufacturing contributing roughly $155 billion and railroad, utilities, and energy revenues totaling about $49.8 billion.2Berkshire Hathaway Inc. 2024 Annual Report
Siemens
The German industrial group Siemens reports five business segments: Digital Industries, Smart Infrastructure, Mobility, Siemens Healthineers, and Siemens Financial Services.3Siemens. Earnings Release Q4 FY 2025 That portfolio covers factory automation software, power grid infrastructure, rail transport systems, medical imaging equipment, and commercial finance. Few companies span that many distinct industries with meaningful revenue in each. Healthineers alone is a major medical technology company that happens to sit inside a larger conglomerate. Siemens has already shed some breadth by spinning off Siemens Energy in 2020, but the remaining structure is still one of the broadest industrial portfolios in the world.
Samsung
Samsung operates through three major divisions: Consumer Electronics, IT and Mobile Communications, and Device Solutions, which houses its semiconductor and display panel businesses.4Samsung. Business Area Device Solutions, which makes memory chips, processors, and OLED panels, regularly generates a large share of the company’s profit. The consumer electronics arm (televisions, home appliances) and the mobile division (Galaxy smartphones) each bring in enormous revenue from completely different customer bases. The broader Samsung Group also includes shipbuilding, construction, life insurance, and other businesses held through a network of affiliates.
Honeywell
Honeywell operates across four reportable segments as of 2026: Aerospace Technologies, Building Automation, Industrial Automation, and Process Automation and Technology.5Honeywell. Honeywell Announces Updated Business Segment Structure Ahead of Aerospace Spin-Off Its aerospace division supplies propulsion, cockpit electronics, and navigation for commercial and defense aircraft. Its building automation arm installs fire prevention, climate controls, and security systems worldwide. The industrial and process automation divisions serve chemical plants, refineries, and factories.
Honeywell is a different kind of diversified company than Berkshire. A common thread of engineering, sensor technology, and software integration runs through divisions that serve very different customers. And Honeywell is about to become less diversified: the company has announced plans to spin off its aerospace business into a standalone entity.
Related and Unrelated Diversification
The companies above illustrate two fundamentally different approaches. Related diversification means expanding into industries that share technology, distribution, or core expertise with the existing business. Honeywell’s move from aerospace sensors to building automation sensors is a classic example. The logic is that shared R&D or manufacturing capabilities make the combined company more competitive than the parts alone.
Unrelated diversification means owning businesses that have nothing in common. Berkshire Hathaway holding both Benjamin Moore paint and FlightSafety pilot training is the archetype. No shared customers, no shared technology, no operational overlap. The rationale is financial: the parent believes it can allocate capital more efficiently than public markets can, deploying cash from mature businesses into higher-return opportunities elsewhere. That approach demands capital allocation skill from headquarters rather than operational expertise, and most management teams turn out to be mediocre capital allocators. That fact matters for what happens next.
Why the List Keeps Shrinking
The long-term trend among large diversified companies has been toward narrowing, not broadening, their portfolios. Several iconic conglomerates have broken themselves apart.
General Electric completed its transformation in 2024, splitting into three independent public companies: GE Aerospace, GE Vernova, and GE HealthCare.6General Electric. GE Spin-Off Resources GE had been the most famous American conglomerate for over a century. The breakup reflected a consensus that the combined entity was worth less than its parts.
Danaher followed a similar path. Once a sprawling industrial conglomerate, it spun off its industrial businesses as Fortive in 2016, its dental businesses as Envista in 2019, and its environmental and applied solutions segment as Veralto in 2023.7Danaher. About Danaher What remains is focused on life sciences and diagnostics, with three segments: Biotechnology, Diagnostics, and Life Sciences.8Danaher. Our Businesses
Johnson & Johnson spun off its consumer health division as Kenvue in 2023, leaving two segments: Innovative Medicine and MedTech.9Johnson & Johnson. Johnson and Johnson Reports Q4 and Full-Year 2025 Results 3M now operates three business groups (Safety & Industrial, Transportation & Electronics, and Consumer) after spinning off its healthcare business as Solventum in 2024.103M. Success Driven by Four Business Groups
The driver behind these breakups is the conglomerate discount: the gap between what the market values the combined company at and what the individual business units would be worth trading separately. Research consistently finds diversified companies trade at a discount to the sum of their parts, typically 5% to 15%, with some European studies finding discounts as steep as 20%. Investors prefer to build their own diversified portfolios from focused pure-play companies. Central management teams cannot be experts in every industry the conglomerate spans. And when cyclical and stable businesses share a balance sheet, lenders price the debt against blended risk rather than giving the stable divisions the cheaper financing they would command alone.
Not every conglomerate suffers this discount equally. Berkshire Hathaway has historically traded at or near its sum-of-parts value because the market trusts its capital allocation record. But for most diversified companies, the discount is a persistent drag on shareholder value and the main reason activist investors push for breakups. The companies still on the diversified list generally have either unique capital allocation advantages, like Berkshire, or governance structures that make breakups impractical, like the chaebol network behind Samsung.
How to Analyze a Diversified Company
A single price-to-earnings ratio is useless for a diversified company because it blends high-growth segments with slow-growth ones. Start with segment reporting, which is required for all US public companies under ASC Topic 280.11Financial Accounting Standards Board. Segment Reporting Any operating segment whose revenue, profit, or assets reach 10% of consolidated totals must be disclosed separately, and the FASB tightened the expense disclosure requirements within each segment in late 2023. That data lets you calculate return on assets, operating margins, and growth rates for each division against its own industry peers.
The standard valuation tool is sum-of-the-parts. Value each segment as if it were an independent public company, applying the multiples its pure-play competitors command. A manufacturing unit might warrant 8 times EBITDA while a software division deserves 20 times EBITDA. Add the segment enterprise values together, subtract consolidated net debt and any minority interests, and compare the result to the current market capitalization. When the sum meaningfully exceeds the market cap, you have identified the conglomerate discount, which is the arithmetic behind almost every breakup thesis.
Tax Structure
The holding company and subsidiary structure creates specific tax advantages that shape how diversified companies are built. When a parent owns at least 80% of the voting power and 80% of the total value of a subsidiary’s stock, the two form an “affiliated group” eligible to file a consolidated federal tax return.12Office of the Law Revision Counsel. 26 USC 1504 – Definitions Consolidated filing allows profits in one subsidiary to offset losses in another, reducing the group’s overall tax bill.
Below the 80% threshold, the dividends received deduction cushions the tax hit on intercompany dividends. A corporate parent owning less than 20% of a subsidiary can deduct 50% of dividends received. Ownership of 20% or more but less than 80% raises the deduction to 65%. At 80% or above, the deduction is 100%.13Office of the Law Revision Counsel. 26 USC 243 – Dividends Received by Corporations Those thresholds explain why most conglomerates prefer to own subsidiaries outright rather than hold minority positions.
Antitrust Limits on Getting More Diversified
Diversified companies that grow through acquisition face scrutiny from the Federal Trade Commission and Department of Justice. Federal antitrust law prohibits any acquisition whose effect “may be substantially to lessen competition, or to tend to create a monopoly” in any line of commerce.14GovInfo. 15 USC 18 – Acquisitions by One Corporation of Stock of Another The 2023 Merger Guidelines set out the frameworks the agencies use, including tests for market concentration and elimination of competition between the merging firms.15Federal Trade Commission. Merger Guidelines
Conglomerate mergers between companies in entirely different industries generally face less resistance than horizontal mergers between direct competitors. Regulators still examine whether the combined entity could disadvantage smaller competitors through bundling or by leveraging dominance in one market to gain footing in another. The larger and more diversified a company becomes, the more likely each subsequent acquisition draws attention.