Can large companies simply buy large companies from smaller industries in order to a) get passive income and b) have alternate industries to fall back on?

Question

EDIT: And they just leave those sub companies as they are (provided they are already making profit), so the only thing that changes it that the excess profit could go to the whole company; they leave it to function the same

ALSO EDIT: Not necessarily passive income (mb) but just to expand the larger companies reach- theoretically could one country have non-negligible stakes in every major industry through this method?

Thank you all this was actually very helpful 😀

In: Economics

Answer 1

Warren Buffett’s [Berkshire Hathaway](https://en.wikipedia.org/wiki/Berkshire_Hathaway) is holding company. Its HQ has only [25 staff](https://www.businessinsider.com/berkshire-hathaway-omaha-office-staff-2016-2) as of 2016. Its [website](https://www.berkshirehathaway.com/) looks like it is from the 1990s, but it is worth $937 billion. It owns several companies outright (GEICO, BNSF) and large chunks of several others (Apple, Coca-Cola, Amex).