4/29/2029

Shareholder Activism in Asia Drives Global Total to Record High

Nikkei Asia (04/29/29) Shikata, Masayuki

Activist shareholders had their busiest year on record in 2024, with the Asia-Pacific region making up a fifth of campaigns worldwide, pushing some companies higher in the stock market and spurring others to consider going private. The worldwide tally of activist campaigns rose by six to 258, up by half from three years earlier, according to data from financial advisory Lazard. Campaigns in the Asia-Pacific tripled over that period to 57, growing about 30% on the year. Japan accounted for more than 60% of the regional total with 37, an all-time high. Activity is picking up this year as well in the run-up to general shareholders meetings in June. South Korea saw 14 campaigns, a jump of 10 from 2023. Critics say South Korean conglomerates are often controlled by minority investors that care too little about other shareholders. Australia and Hong Kong saw increases of one activist campaign each. North America made up half the global total, down from 60% in 2022 and 85% in 2014. Europe had 62 campaigns last year. The upswing in Japan has been fueled by the push for corporate governance reform since 2013 and the Tokyo Stock Exchange's 2023 call for companies to be more mindful of their share prices. The bourse has encouraged corporations to focus less on share buybacks and dividends than on steps for long-term growth, such as capital spending and the sale of unprofitable businesses. Demands for capital allocation to improve return on investment accounted for 51% of activist activity in Japan last year, significantly higher than the five-year average of 32%. U.S.-based Dalton Investments called on Japanese snack maker Ezaki Glico (2206) to amend its articles of incorporation to allow shareholder returns to be decided by investors as well, not just the board of directors. Though the proposal was rejected, it won more than 40% support, and Glico itself put forward a similar measure that was approved at the following general shareholders meeting in March. U.K.-based Palliser Capital took a stake last year in developer Tokyo Tatemono (8804) and argued that more efficient use of its capital, such as selling a cross-held stake in peer Hulic, would boost corporate value. Activist investors are increasingly seeking to lock in unrealized gains from rising land prices, reaping quick profits from property sales that can go toward dividends. Companies in the Tokyo Stock Exchange's broad Topix index had 25.88 trillion yen ($181 billion at current rates) in unrealized gains on property holdings at the end of March 2024, up about 20% from four years earlier. After buying into Mitsui Fudosan (8801) in 2024, U.S.-based Elliott Investment Management this year took a stake in Sumitomo Realty & Development (8830) and is expected to push for the developer to sell real estate holdings. This month, Dalton sent a letter to Fuji Media Holdings (4676), parent of Fuji Television, calling for it to spin off its real estate business and replace its board of directors. Activist campaigns have sparked share price rallies at some companies. Shares of elevator maker Fujitec (6406) were up roughly 80% from March 2023, when it dismissed Takakazu Uchiyama -- a member of the founding family -- as chairman under pressure from Oasis Management. The rise in demands from activists "creates a sense of tension among management, including at companies that don't receive such proposals," said Masatoshi Kikuchi, chief equity strategist at Mizuho Securities. Previously tight cross-shareholdings are being unwound, and reasonable proposals from minority investors are more likely to garner support from foreign shareholders. Some companies are going private to shield themselves from perceived pressure. Investments by buyout funds targeting mature companies in the Asia-Pacific were the highest in three years in 2024, according to Deloitte Touche Tohmatsu. Toyota Industries (6201) is considering going this route after facing pressure from investment funds last year to take steps such as dissolving a parent-child listing with a subsidiary and buying back more shares. Toyota Industries holds a 9% stake in Toyota Motor (7203). The automaker "may have proposed having [Toyota Industries] go private as a precautionary measure," said a source at an investment bank.

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1/2/2026

Will Japan's M&A Boom Continue in 2026?

Nikkei Asia (01/02/26) Sigami, Maki; Obe Mitsuru

Mergers and acquisitions involving Japanese companies surged to an all-time high in 2025. Deals depend on many factors, both internal and external, so it is hard to predict precisely what's to come, but investment bankers are broadly upbeat, predicting that last year's strong activity could be the beginning of a secular uptrend. Japanese corporate managers used to be passive about M&A, said Yoichi Yamasaki, managing director at Houlihan Lokey in Japan. They considered it if they were broached by investment bankers, but not otherwise. "They've become much more proactive. They now approach investment bankers rather than the other way round, with a clear vision about how they want to grow their business and what kind of assets they are looking for." The change became more evident in the last five years as asset divestiture became more common. The COVID pandemic served as an impetus by forcing companies to restructure. In the aftermath of COVID, the Tokyo Stock Exchange in 2023 urged listed companies to work harder to raise their share prices and prioritize shareholder interests. Guidelines were also issued from the Ministry of Economy, Trade and Industry the same year urging companies to embrace takeover bids made in good faith. Corporate chieftains are also feeling pressure from shareholder activism. Management buy-outs (MBOs) are another trend to watch. In Japan, the number totaled a record 23 in the first nine months of 2025. But such deals may face more scrutiny this year from minority shareholders over buyout prices. An ongoing takeover battle over personal care products maker Mandom (4917) illustrates the challenge. The company's founding member announced an MBO in September with the help of a fund operator affiliated with CVC Capital Partners. Investors quickly took issue with the buyout price and started competing for control of the company. In November, management got close to a deal after reaching an agreement with the activists. But a counterbid from KKR (KKR) in December extended the battle into this year. "The hurdle for MBOs is likely to go up. More funds will be necessary along with a stronger story to make a company more valuable through an MBO," says Takashi Ohara, who leads the M&A practice at Bain & Co.'s Tokyo office.

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1/1/2026

New ACCC Merger Rules Go Into Effect in Australia

Australian (01/01/26) Snowden, Angelica

The new notification thresholds for mergers and acquisitions announced by the Australian Competition and Consumer Commission (ACCC) are likely to initially slow down transactions as the regulator grapples with an increase in its workload, M&A specialists say. Despite a new layer of regulation, Rothschild & Co managing director and Australia’s head of global advisory Alex Cartel expected a busier 2026. One feature was a continued rise in activist action across the local market, which was likely to continue, Cartel said. “It’s slightly different than what we see offshore where you’ve got some very large specialist activist funds. Here it’s smaller. They’re almost growth funds with an activist limb like an L1 Capital, for example, who have made some material impacts on transactions this year,” he said. “You could also call the whole James Hardie (JHX) situation, where 21 shareholders wrote in and effectively petitioned the ASX for a change to their listing rules – you could refer to that as a form of shareholder activism as well.” Other activist funds include Samuel Terry Asset Management and Sandon Capital. As well, offshore funds like Palliser agitated on Rio Tinto’s (RTNTF) register recently, and Snowcap, a smaller activist fund out of London, has previously weighed in on Santos (SSLZY) and AGL (AGL). More “traditional, long-term investors” like superannuation funds are increasingly becoming active. “Superannuation funds who historically were seen as passive investors, are now actually becoming far more active, including in M&A situations,” Cartel said. In December UniSuper increased its shareholding in Qube Holdings (QUB) to 9.95%, after Macquarie lobbed a bid for the terminals business for $9.2 billion. And AustralianSuper in 2023 blocked a $20 billion takeover offer for Origin Energy (ORG). “That’s been a real change in behavior from that class of shareholders. Nobody would call them activists, but they are certainly no longer seen as passive,” Cartel said.

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12/31/2025

Companies Line Up $1tn of Asset Sales as Activists Push Break-ups

Financial Times (12/31/25) Levingston, Ivan; Barnes, Oliver

Companies including Unilever (ULVR) and Kraft Heinz (KHC) announced more than $1 trillion of asset sales in 2025, the highest level in three years, as businesses came under pressure from activist investors to simplify and reignite growth. Total asset sales and divestments had already reached nearly $1.2 trillion through mid-December across nearly 7,000 transactions, according to data provider Dealogic, the highest level since 2021. Conglomerates have fallen out of fashion as investors gravitate towards focused businesses in a challenging and uncertain economic environment. Activist hedge funds are putting management teams of such businesses under pressure to boost valuations by streamlining operations and freeing up cash. “When you simplify the portfolio and sharpen the equity story in an uncertain environment, these are lower-risk transactions,” said Philipp Beck, head of M&A in Emea for UBS. “It’s typically easier to do a carve-out than a big bolt-on, or some sort of transformational transaction.” A spate of break-ups has hit the consumer sector, which is struggling with persistently high inflation, subdued consumer spending and changing customer preferences. Kraft Heinz said in September it was planning to separate its slower-growth grocery staples from its sauces, spreads and seasonings business, best known for the Heinz brand, unraveling a deal that created the packaged food group a decade ago. Other leading examples include Unilever’s spin-off in December of its ice cream division, named The Magnum Ice Cream Company (MICC), and Keurig Dr Pepper’s (KDP) plan to separate its coffee and soft drinks businesses, after it completes a €15.7bn deal to buy European coffee chain JDE Peet’s (JDEP). In the media industry, which is also being upended by disruptive forces, Warner Bros Discovery (WBD) announced plans in June to split its declining cable TV assets from its streaming and studios arm. The proposal catalysed a bidding war between Netflix (NFLX) and Paramount (PSKY). “Corporate carve-outs have been an important source of large M&A in 2025,” said Stephen Pick, Barclays’ head of Emea mergers and acquisitions. “We expect that to continue into 2026 as simplification and capital recycling into higher growth, higher returning businesses remain a focus in boardrooms, in many cases catalysed by activist pressure.” Other deals remain in the works. FTSE 100 conglomerate Associated British Foods (ABF) announced in November that it is exploring a separation of its fast-fashion chain Primark from its food business. Many industrial groups have also taken steps to unwind in 2025, such as New York-listed agricultural supplier Corteva (CTVA), which is splitting its seed and pesticides businesses. Meanwhile, BP (BP) is in talks over a sale of its $8bn Castrol lubricants arm, cement company Holcim (HOLN) has spun off its North America division, and Honeywell (HON) has announced plans to split into three companies, caving into pressure from Elliott Management. “You’re seeing big companies break up at a faster clip because as companies have gotten larger, they have component pieces that are scaled, market-leading companies in their own right,” said Tom Miles, global head of M&A at Morgan Stanley. This past year has been a record year for activist campaigns, with a Barclays report finding that 191 had been carried out in the year to October. Smiths Group (SMIN) — one of the UK’s last, listed industrial conglomerates — sold two of its business units after coming under pressure from activist investors including Elliott. Private equity firms are often the natural buyers of divested assets, taking them off the hands of companies in the belief that managing them in a more focused way can improve their valuations.

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12/30/2025

Company Boards on Notice as Shareholders Use Voting Power to Oust Directors, Reject Pay Packets

Australian (12/30/25) Snowden, Angelica

Australian shareholders are demanding greater transparency from company executives and public boards and are increasingly prepared to punish them with pay hits and even vote out directors if their decisions don’t align with what is best for long term performance. Shareholders rebuked boards amid concerns about bad deals, performance and ongoing scandals in 2025 — including James Hardie (JHX), ANZ (ANZ), and WiseTech Global (WTC) — by using their voting powers, Australian Shareholders Association Chief Executive Rachel Waterhouse said. “Trust is an asset, and boards spend it quickly when leadership is perceived to be conflicted, distracted or unaccountable,” Ms Waterhouse said. “Importantly, accountability in 2025 did not stop at remuneration resolutions. Director elections and other (annual general meeting) motions increasingly carried the same message: shareholders will use the ballot paper when the board is not listening,” she said. Australian Securities Exchange research estimated 7.7 million Australians hold listed investments, Ms Waterhouse said. “AGM resolutions are not a niche concern. They are a mass market accountability mechanism,” she said. According to the latest Australian Shareholders’ Association’s investor sentiment survey, when asked to identify the one thing they most want ASX boards to do better in 2026 the largest group, 37.9%, nominated remuneration that aligns with realized performance. Out of 124 respondents, the next priority was better capital allocation discipline, including dividends, buybacks, acquisitions, and dilution, at 19.35%.Board effectiveness, including chair leadership, capability and engagement, attracted 17.74%, followed by stronger accountability at 16.94%. Clearer disclosure and transparency, including cash flow and key drivers, was selected by 8.06%. WiseTech Global copped its first shareholder strike in November, amid a string of scandals linked with founder and executive chairman Richard White. More than 49% of shareholders rejected the pay packets of Mr White and some of his executive team at the AGM in November. The protest came after the company revealed the Australian Securities and Investments Commission (ASIC) raided WiseTech’s office amid an insider trading investigation. The ASIC probe follows a number of alleged sex for business advice scandals that have haunted Mr White and WiseTech, prompted by beauty entrepreneur Linda Rogan’s court settlement with the billionaire in late 2024. Other significant strikes included at ANZ, where more than 32% of shareholders voted against the remuneration report, delivering a second consecutive strike despite the bank’s attempt to revive its brand with new CEO Nuno Matos. As well, Accent Group’s remuneration report drew an 81.97% vote against and CSL received a second strike, with shareholders rejecting a board spill. Ms Waterhouse said “it would be convenient to explain these outcomes as a revolt against pay." “A remuneration vote is rarely only about the numbers. It is a referendum on trust: the belief that the board is exercising judgment that is fair, defensible, and aligned with long term owners,” she said. Ms Waterhouse said James Hardie was the “clearest reminder that shareholder power is real." “Its AGM resulted in shareholders voting out the chair and two directors, voting against the remuneration report, and rejecting proposed increases to non-executive director fees,” she said. “That is not a routine protest. It is a board level rebuke delivered through the company’s own constitutional machinery. “It also speaks to a deeper point: when material decisions proceed without a shareholder vote, boards should not be surprised if shareholders express their view elsewhere, including in director elections.” Ms Waterhouse also previously warned against replacing truly hybrid AGMs with in-person meetings plus a webcast because they disenfranchise shareholders by “stripping away the right to participate in real time." “Hybrid AGMs are no longer novel, and they should not be framed as a concession,” she said. “They are the baseline expectation for an investable market with geographically dispersed owners. “A hybrid AGM only works when online participation is genuine where shareholders can ask questions, follow the process, and vote with confidence. A one-way broadcast is not access.” Boards in 2026 should “treat trust as an asset that must be earned continually, not a reserve that can be drawn down whenever it suits,” Ms Waterhouse said. As well, AGMs should be run for participation, not performance. Ms Waterhouse suggested boards should stop using shareholder funds to run campaigns leading to supporting contested AGM resolutions. She argued it was better to explain a resolution properly in the meeting materials instead of wasting money on proxy solicitation. “If the board’s position depends on consultants, scripts, and pressure tactics, it is time to revisit the substance here and now, not after the vote.” James Hardie shareholders took 15 minutes to dump its chairwoman Anne Lloyd and two directors, Rada Rodriguez and Peter-John Davis, at a fiery October AGM in retaliation for the diabolical $15bn Azek takeover. They never had a say in the deal.

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12/30/2025

Opinion: Why Australian Shareholders Are Using Their Votes to Fire Directors and Reject Pay

Australian (12/30/25) Waterhouse, Rachel

Rachel Waterhouse, CEO of the Australian Shareholders’ Association, writes that in January she asked whether boards would learn from past errors. In 2025, shareholders marked the paper. At the start of this year, she argued that 2025 would test whether boards could rebuild trust through genuine transparency, stronger accountability, and better engagement with the owners of listed companies. She pointed to five pressure points: the drift away from true hybrid AGMs, the need for ethical leadership and freedom from conflicts, board effectiveness and director capacity, a more mature approach to ESG risk, and pay structures that reward long-term value rather than short-term optics. Twelve months on, the verdict has arrived in the most direct language available to shareholders: votes. That matters because Australia is a nation of investors. ASX research estimates 7.7 million Australians hold exchange investments, so AGM resolutions are not a niche concern. They are a mass market accountability mechanism. Yet one of the persistent weaknesses in our market is that too many retail shareholders remain disengaged from the companies they own. The AGM is not theatre. It is the formal forum where owners approve or reject resolutions that shape governance and value: remuneration reports, director elections, constitutional changes, and major transactions. If you cannot attend, there is still a straightforward way to participate: vote online in advance, or appoint a proxy and direct how your votes should be cast. When retail investors do not use these tools, they leave decision-making to others and reduce the pressure on boards to lift standards. The priorities retail shareholders want addressed are not hard to identify. In the Australian Shareholders’ Association’s latest Investor Sentiment Survey, 124 respondents were asked the one thing they most want ASX 200 boards to do better in 2026. The largest group, 37.90%, nominated remuneration that aligns with realized performance. Next was better capital allocation discipline, including dividends, buybacks, acquisitions and dilution, at 19.35%. Board effectiveness, including chair leadership, capability and engagement, attracted 17.74%, followed by stronger accountability at 16.94%. Clearer disclosure and transparency, including cash flow and key drivers, was selected by 8.06%. Australia’s two-strikes rule is often treated as a technicality, but it is better understood as a warning light. When more than 25% of votes oppose a remuneration report, investors are signalling that the board’s judgment is not landing. In 2025, that warning light flashed repeatedly. In 2025, Accent Group’s (AX1) remuneration report drew an extraordinary 81.97% vote against. WiseTech Global (WTC) recorded a first strike with about 49.47% voting against its remuneration report. CSL (CSL) received a second strike, with shareholders then voting down a board spill. At ANZ (ANZ), more than 32% voted against the remuneration report, delivering a second consecutive strike. It would be convenient to explain these outcomes as a revolt against pay. That misses what shareholders are actually saying. A remuneration vote is rarely only about the numbers. It is a referendum on trust: the belief that the board is exercising judgment that is fair, defensible and aligned with long-term owners. When performance is under pressure, when an organization is working through conduct issues, or when the narrative reads as curated rather than candid, investors become less tolerant of discretion, complexity and outcomes that feel insulated from consequences. Importantly, accountability in 2025 did not stop at remuneration resolutions. Director elections and other AGM motions increasingly carried the same message: shareholders will use the ballot paper when the board is not listening. James Hardie (JHX) was the clearest reminder that shareholder power is real. Its AGM resulted in shareholders voting out the chair and two directors, voting against the remuneration report, and rejecting proposed increases to non-executive director fees. That is not a routine protest. It is a board-level rebuke delivered through a company’s own constitutional machinery. It also speaks to a deeper point: when material decisions proceed without a shareholder vote, boards should not be surprised if shareholders express their view elsewhere, including in director elections. There is another irritant boards should not ignore, and it sits squarely in the AGM process. Retail shareholders do not want to see their money spent on campaigns designed to change voting outcomes rather than improve the underlying proposal. This is not about legitimate investor relations. It is about use of shareholder funds for what looks and feels like vote management: consultants, scripts, selective engagement, and pressure tactics in the weeks before a contested resolution. If a resolution is sound, make the case directly in the notice of meeting. Explain the trade-offs. Disclose the material costs clearly and prominently. Answer questions in full, including the ones that challenge the board’s preferred narrative. Then accept the vote. Spending shareholder money to manufacture consent is not a substitute for governance. It signals the board does not trust the merits of its own position. ANZ was delivered a second strike when more than 32% voted against the remuneration report. The other arena where trust was tested in 2025 was the AGM experience itself. Hybrid AGMs are no longer novel, and they should not be framed as a concession. They are the baseline expectation for an investable market with geographically dispersed owners. A hybrid AGM works only when online participation is genuine: shareholders can ask questions, follow the process, and vote with confidence. A one-way broadcast is not access. When shareholders sense the meeting is being managed to reduce scrutiny rather than facilitate it, dissatisfaction lingers long after the chair’s closing remarks. Board effectiveness also moved further into the spotlight. Investors are less interested in generic statements about “experience” and more interested in evidence that a board can govern through complexity: a credible skills mix, genuine renewal planning and directors with the time to do the job properly. Chair leadership matters here. A strong chair does not treat the AGM as a performance to be controlled. They treat it as the owners’ forum, and run it accordingly. The survey results point to another theme that routinely surfaces at AGMs: capital discipline. Investors are watching capital allocation decisions more closely, particularly acquisitions, buybacks and the equity raisings that can dilute existing owners. When boards ask shareholders to approve a transaction, or x accept dilution through placement-heavy structures, they need to show their workings. Retail investors may not have the same access to management as institutions, but they can read a balance sheet and they can vote. Looking ahead, governance pressure will not ease. Market structure is shifting, and more Australians are exposed to assets held outside listed markets through superannuation and managed funds. As capital moves into less transparent settings, the need for robust governance, credible valuation practices and clear management of conflicts becomes more important, not less. Trust cannot be assumed when visibility declines. So what should boards take from 2025 as they look into 2026? First, treat trust as an asset that must be earned continually, not a reserve that can be drawn down whenever it suits. That means ethical leadership, clear accountability, and decisions explained in plain English, not disclosed defensively. Second, treat shareholders as owners in practice. Run AGMs for participation, not performance. Provide genuine hybrid access. Answer questions with substance. Third, stop using shareholder funds to campaign shareholders into supporting contested AGM resolutions. If the board’s position depends on consultants, scripts, and pressure tactics, it is time to revisit the substance here and now, not after the vote. Fourth, simplify and strengthen the link between reward and long-term value creation, and be candid about outcomes. If boards want shareholders to back ambitious incentives, they must be prepared to justify them clearly and accept the consequences when the justification does not hold.

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12/30/2025

Target Stock Needs a Spark. An Activist Investor Could Provide It

Barron's (12/30/25) Escobar, Sabrina

Target’s (TGT) recent struggles appear to have attracted an activist investor. It could be just the catalyst the stock needs, one analyst says. Last week, the Financial Times reported that hedge fund Toms Capital Investment Management had built up a significant stake in Target, citing people familiar with the matter. The size of the stake is unknown. Target didn’t immediately respond to a request for comment from Barron’s. A spokesman for TCIM declined to comment. TCIM has taken activist positions pushing for change at Kenvue (KVUE), Kellanova, and U.S. Steel. Target stock is up 7% over the past month, compared with a 0.8% increase in the S&P 500, and the fund’s involvement could help keep the rally going, Wolfe Research analyst Spencer Hanus says. The shares trade at about 15 times the earnings per share expected over the next year, and most investors expect profits to decline over that period, priming the stock for a so-called “hope trade,” Hanus wrote in a research note Monday. A hope trade happens when investors buy a stock not because a company’s fundamentals are good, but because poor performance has already been reflected in the price, so any good news could move the stock higher. In this case, the hope is that an activist could push the company to make big changes. “An activist can help drive the ‘change narrative’ at Target, which would be a positive since the current messaging with Michael Fiddelke taking over as CEO has made it seem to investors that there won’t be much change,” Hanus wrote. “We don’t think that is a totally fair assessment, but perception is reality.” Hanus rates Target stock at Underperform with an $81 price target, while the shares were at $97.50 on Tuesday morning. This isn’t Target’s first tango with an activist investor. In the wake of Target’s announcement that current CEO Brian Cornell was stepping down, activist group The Accountability Board filed a shareholder proposal aimed at keeping him from chairing the board of directors. And Bill Ackman’s Pershing Square Capital Management launched an activist campaign in the late 2000s, pushing for the company to spin off its real estate and sell its credit-card operations. Ackman’s campaign led to a proxy fight after the stock took a tumble in response to the 2007-09 financial crisis. Target eventually won. Activists could again push for Target to sell off its real estate, a popular approach in other campaigns involving retailers. But Hanus said that would make him more cautious on the company’s longer-term future, given that most Tier one retailers still own a significant portion of their real estate. Target stock is down 28% this year, reflecting investor concerns over the company’s market-share losses and sluggish sales. Annual revenue has declined for two consecutive fiscal years, falling 1.6% in the 12 months through January 2024, and 0.8% in the fiscal year ended this January. Once viewed as a retail winner, Target has suffered from a dearth of merchandise, skimpy staff, and messy stores. High inflation and economic uncertainty exacerbated those issues, prompting consumers to spend less on the discretionary items that have long been Target’s forte. On top of switching things up at the C-suite, Target is planning to invest $5 billion in 2026 alone to improve its stores and merchandising strategy. The company also recently announced layoffs. Those efforts should help jump-start the business, Hanus wrote, but it will take time for them to show up in the results. And there is still more opportunity to improve, he added, such as increasing labor hours in stores, refreshing merchandise, and spending more on advertising.

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12/30/2025

FTSE 100 Loses the Last of Its Industrial Conglomerates

Financial Times (12/30/25) John, Jamie; Levingston, Ivan

The UK’s industrial conglomerates were once a cornerstone of the domestic market. But the FTSE 100 this year lost the last of those diversified engineering and manufacturing businesses, with the break-up of Smiths Group (SMIN) and the slimming down of DCC (DCC). After decades of retreat by public market investors from the sprawling business models, the unravelling gathered pace in recent years as private equity groups scooped up unloved industrial assets and technology further tilted the argument away from conglomerates. “The whole model of the UK-listed industrial [sector] has changed dramatically,” said Harry Philips, research analyst at Peel Hunt. “We no longer have the sprawling conglomerates of old.” Smiths, which sold off its detection and electrical connectors businesses, had been a candidate for a break-up for more than a decade after it sold its aerospace division in 2007, analysts said. But it resisted such calls until the beginning of 2025, when Engine Capital sent a letter to the board calling for a strategic review or sale. After the sale of two of its four businesses in quick succession, shares in the company, which now consists of engineering component makers John Crane and Flex-Tek, have risen by a third since the start of 2025. At DCC, divestments are progressing at pace. The company, which was once a diversified conglomerate with interests ranging from service stations to nutritional supplements, plans to focus on energy. It signed off on the sale of its healthcare unit in September and plans to complete the sale of its technology division by the end of 2026. The result, said analysts and bankers, is that London’s public markets will enter the new year with no large sector-spanning industrial groups. “You don’t actually have real large conglomerates any more because when you go north of a £1bn market cap all the companies are quite pure play,” said Rob Jurd, head of European industrials at RBC. The so-called conglomerate discount has long been a driver for break-ups and spin-offs. Imperial Chemical Industries, the vast British conglomerate behind such products as Dulux paints and Perspex, began its 15-year-long break-up in 1993. Hanson, the group built up by swashbuckling corporate raiders Gordon White and James Hanson, embarked on its own demerger three years later, splintering into smaller groups, including Imperial Tobacco. The case for the divestments now, as then, is that slimmed-down businesses attract higher valuations than hulking cross-sector groups, because they are easier for investors to understand and can react faster to market shifts. It is an argument that has also won out beyond British shores. Honeywell (HON), one of America’s last big industrial conglomerates, announced plans to spin off its aerospace division as part of a three-way split. It came after Elliott Management amassed a $5bn stake in the century-old industrial group and called for a break-up.

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