Corporate break-ups are in vogue these days. Here’s why: Over the course of less than two weeks in November, General Electric (GE), Johnson & Johnson, and Toshiba each announced that they were splitting up into smaller, more focused firms that would allow them to streamline their operations. In early November, GE announced that it was breaking up into three separate businesses by 2024, covering healthcare, power and aviation. A week later, the world's largest health care company, Johnson & Johnson, announced that it would split into two companies, with one focusing on consumer health producing over-the-counter products like Tylenol, Listerine and Band-Aid, and the other on pharma (medical products, including the highly lucrative vaccine manufacturing). That same week, Toshiba announced plans to split into three companies, one focused on energy and infrastructure, one focused on hard disk drives and semiconductors, and the third focused on flash memory chips.

Breaking up conglomerates is hardly new. The breakup of Bell System into eight separate companies (one of which became AT&T) in 1984 in response to an antitrust lawsuit was the first in a wave of conglomerate breakups during that decade. In the aftermath of the 2008 financial crisis, industrial conglomerates like Citigroup and Motorola broke up, while others came under pressure from activist investors to do so. Last year, AIG separated its life ins. arm from its property and casualty arm. Companies like Siemens, Honeywell International and United Technologies Corporation (UTC) have also been splitting up or slimming down to optimize their operations over the past few years.

So, why do these breakups happen? While the reasons for streamlining their operations differ — with some, like Johnson & Johnson, looking to offload liability weight while others, like GE, attempting to fix missteps of the past — the fact remains that companies often have to shed deadweight to continue pleasing their shareholders. The rationale for consolidating companies is almost always increased efficiency. But once a conglomerate reaches critical mass and the system stops working, and people realize that businesses rise and fall together, breakups become more attractive, says the Wall Street Journal’s Jason Zweig explains (watch, runtime: 5:52). In the long run, the break ups promise to create more value for investors. Additionally, companies move more slowly and get bogged down by bureaucracy as they grow, making it difficult for them to remain nimble market players.

Conglomerate breakups are perceived differently in the US than in Europe or Asia. In the US, it is widely accepted that oversized, underperforming companies may be broken up to provide more value. The recent breakups of Toshiba in Japan and Siemens in Germany, for instance, were met with more resistance due to the perception that the breakups were a result of the failure of those companies' management.

This isn’t only happening abroad: Orascom Investment Holding (OIH) announced last year its plans for a “horizontal demerger” to allow the company to delineate between its investments in financial services and other industries. The split saw OIH spin off its assets including investment bank Beltone and non-bank financial services player Sarwa Capital into Orascom Financial Holding. OIH retained the rest of its holdings and investments in nine subsidiaries and sister companies, including ​​its Pyramids plateau venture as well as legacy assets including a mobile network in North Korea.

Industrial conglomerates may be losing favor — but tech conglomerates are on the rise. While large industrial conglomerates may be scaling down, tech companies like Alphabet, Amazon, Microsoft and Tesla are consolidating — not to mention diversifying — their business lines, with one Forbes contributor referring to the tech companies as the third wave of conglomerates. Their ability to consolidate and diversify comes not from the consolidation of capital, which was a feature of early industrial-era conglomerates, or management, which facilitated the rise of behemoths like GE, but rather from the systems that they use to compile, manage and utilize data.