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Fortune

Diane Brady

Why conglomerates fail

GE Honeywell Geoff Colvin CEO Daily Fortune

(Credit: Elijah Nouvelage—Bloomberg/Getty Images)

In today’s CEO Daily: Geoff Colvin on the failure of once-trendy diversified conglomerates.
The big story: U.S.-Russia meeting on Ukraine.
The markets: No drama.
Analyst notes from UBS, JP Morgan, and Wedbush.
Plus: All the news and watercooler chat from Fortune.

Good morning. I’ve watched with great interest the recent news from Honeywell, that the company plans to break itself up into three independent entities (automation technology, aerospace technology, and advanced materials). An activist investor, Elliott Management, had prodded the company to separate its businesses as its stock price went nowhere over the past four years, while the S&P 500 rocketed some 60%. Just maybe the planned separation will finally put a stake through the heart of a terrible business idea that lived far too long: the diversified conglomerate.

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