According to Sebastien Canderle in his article Private Capital: Lessons from the Conglomerate Era, dated October 4, 2023, posted by the CFA Institute, conglomerates have rarely maximised long-term shareholder value. “Too often, whatever synergies they manage to create fail to compensate for the costs associated with the increased complexity. Such conglomerates seek out scope as well as scale, even when they lack expertise in the targeted sectors.”
During Oversea-Chinese Banking Corp’s 2024 AGM, chairman Andrew Lee likened OCBC to a financial conglomerate nine times.
On Feb 1, Loh Chin Hua, CEO of Keppel (it dropped Corp to distance itself from being a conglomerate), pointed out that during 2023, Keppel “unveiled the next phase of our Vision 2030 transformation, shedding our conglomerate structure to become a global asset manager and operator”. He had, years earlier, griped that Keppel suffered from a conglomerate discount.
