Diversification is a strategy to decrease the business risk of a company by partcipating in different industries with not perfect correlated profit patterns. 

During the third Merger Wave between 1965 and 1969, companies usually bought unrelated companies. Diversified conglomerates were the result.

In absence of synergies the diversification through activities in different industries makes no sense and does not affect the market value of a specific firm. Sure, the profits are less risky than those of a specialized firm, but investors can diversify their stock portfolio by themselves. So there is no reason to pay a premium for diversified firms.

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