A conglomerate is a large corporation that has controlling interests in several smaller companies. It is made up of a number of different, usually unrelated businesses. It is formed by either takeovers or mergers. In most cases, a conglomerate supplies a variety of goods and services that are not necessarily related to one another.


In a conglomerate, one company (the corporation) owns a controlling stake in a number of smaller companies (subsidiaries) that conduct business separately. Each of a conglomerate’s subsidiary businesses runs independently of the other business divisions, but the subsidiaries’ management reports to senior management at the parent company.



  1. Diversification helps in the reduction of investment risk: By having a wide range of companies in different industries, poorly performing companies or industries can be balanced by other sectors.
  2. Companies owned by conglomerates have access to internal capital markets, enabling more ability to grow. A conglomerate can allocate capital for one of their companies if external capital markets aren’t offering at terms the company wants.



  1. The extra layers of management increases costs.
  2. The accounting disclosure of a conglomerate is complicated, since a lot of figures are released as a group, rather than separately for each business. This, therefore, makes it difficult for managers, investors, and regulators to analyze financial information.
  3. Innovation can be stifled due to bureaucracy and inertia.


Examples of Nigerian Conglomerates


Dangote Group

Dangote Group is the largest conglomerate in West Africa and one of the largest in the continent. It is one of the leading diversified business conglomerates in Africa, employing more than 26,000 people.

Subsidiaries: Dangote cement, Dangote Sugar, Dangote Flour

Products: cement, sugar, salt, flour, noodles, steel, oil & gas, and packaging materials.

Services: logistics and real estate.



A manufacturing company and conglomerate with eight (8) subsidiaries which include:

Subsidiaries: Dufil Prima Foods PLC, Northern Noodles Limited, De United Foods Industries Limited, Pure Flour Mills Limited, Raffles Oil LFT Enterprise, Tolaram Group

Products: Indomie instant noodles, minimie chinchin, power pasta, power oil and minimie instant noodles



Subsidiaries:  Tyrrell Wine Nig Ltd, Bio-Floc Integrated Ltd, Coastal Aquatic & Terrestrial Animals Research Institute, Oxygen Integrated Securities Solution Ltd, Afrizone Marketing & Communication Ltd.

Services: Maritime, Energy, Construction, Security, Oil and gas, Foods and agro allied.



Nestlé owns over 2000 brands in over 150 countries. In Nigeria, Nestle is one of the foremost manufacturing and marketing company in the country.

Products: Nido, Cerelac, Golden morn, Maggi, Pure Life etc.


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