These iconic American companies are breaking up
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Illustration: Annelise Capossela/Axios
Some of America's most iconic companies are heading for splitsville, having decided their businesses will be worth more apart than they are together.
Why it matters: The movement calls into question the future of the conglomerate model, which was long hailed as a way for companies to maximize profits.
Driving the news: Chemical maker DuPont announced yesterday after the closing bell that it's breaking up into three publicly traded companies:
- Electronics (a $4 billion revenue company), water ($1.5 billion) and industrial ($6.6 billion).
The big picture: It's just the latest in a series of companies following a similar path.
- 2021, 2022 and 2023 ranked first, second and third, respectively, in most spinoffs from the last 10 years, Bloomberg reported.
Zoom in: 211 companies completed spinoffs in 2023. Among them:
- Johnson & Johnson split off its consumer business into a new company, Kenvue, with products like Band-Aids, Tylenol and Listerine.
- Kellogg split into snacking company Kellanova and North American cereal company WK Kellogg.
And General Electric split up into three companies this year: GE HealthCare, GE Aerospace and energy business GE Vernova.
What they're saying: "They are loose collections of parts that don't always make sense to keep together anymore," Barry Cross, a professor at the Queen's University Smith School of Business, told Bloomberg.
- Splitting up "can provide more value with focused leadership teams and fewer distractions from brother and sister units."
What we're watching: Yesterday's industrial conglomerates may be disappearing, but Big Tech has been borrowing their old playbook, a trend the Economist noted back in 2019.
- Critics say they have accumulated too much heft — in disparate industries — via their incredible size.
- Amazon, Apple and Google all face FTC lawsuits accusing them of having monopoly power.
The bottom line: Bigger isn't always better.
