The Conglomerate Conundrum: When Less is Not More

Cezar Consing’s tenure as CEO of Ayala Corporation has been marked by a resolute commitment to the conglomerate model, one that defies current trends in corporate strategy. Despite investor and analyst pressure for break-ups and spin-offs, Consing has doubled down on the structure that many see as outdated.

The numbers tell a story: after a record-breaking year in 2025, Ayala’s earnings dropped by 7% over the first six months of 2026, with profits at Ayala Land, one of its flagship divisions, falling by 19%. Yet Consing remains determined to keep the sprawling conglomerate intact.

A Legacy of Conglomerates

Ayala Corporation has a rich history spanning nearly two centuries. Founded in 1834 by Domingo Roxas and Antonio de Ayala, it has navigated economic shifts and societal changes. As Consing notes, “I look at Ayala more as an idea.” This idea – one of adaptability and relevance – is rooted in the conglomerate’s ability to pivot between businesses that matter for the times.

Ayala’s legacy raises questions about the continued viability of the conglomerate model. General Electric’s breakup into three separate companies serves as a symbol of the trend towards corporate divorces, while the “conglomerate discount” has become a harsh reality.

Synergy or Subsidy?

Consing’s approach to synergy within Ayala’s diverse portfolio is instructive. He has implemented a system where individual divisions are expected to contribute more in return for central support. The creation of the ACMobility board, comprising CEOs from various group companies, demonstrates this strategy.

While AC Logistics draws a significant share of its business from sister companies like Globe Telecom and ACEN, synergy is not automatic. Consing acknowledges that the temptation to focus on immediate goals can be overwhelming. The creation of ACMobility, which posted a loss in the first half of 2026, highlights the challenges inherent in making diverse portfolio work together.

A Different Stance

The Ayala Corporation’s commitment to the conglomerate model sets it apart from its Western counterparts. While companies like General Electric and Johnson & Johnson have shed their non-core businesses, Consing is determined to maintain the group’s diversified structure. His argument – that a diverse portfolio can create value when managed correctly – challenges conventional wisdom.

In an era where investors increasingly demand break-ups and spin-offs, Ayala Corporation stands as a testament to the enduring appeal of the conglomerate model. However, this commitment also raises questions about the company’s long-term sustainability.

Relevance in Asia

The Ayala Corporation’s dominance in Southeast Asia is a testament to the region’s affection for conglomerates. As emerging economies continue to plug “institutional voids,” diversified groups like Ayala serve as foundational pillars. In this context, Consing’s stance on the conglomerate model takes on added significance.

Ayala Corporation’s legacy is built on its ability to adapt and evolve over time. However, this very flexibility also raises questions about the company’s commitment to tradition. As the landscape continues to shift, it remains to be seen whether Consing’s vision for a diversified conglomerate will prove prescient or ultimately obsolete.