Family Business Yearbook 2017

Family business in Latin America | Facts and figures

Of the world’s 500 largest family businesses, 7.4% (37) are located in Latin America.

Source: Global Family Business Index, University of St. Gallen, Center for Family Business.

The largest family businesses in Latin America The top 10 family businesses generated approximately US$250.8 billion of Latin America’s GDP of US$5.3 trillion in 2015 and employed more than 1.2 million people.

Rank 1 2 3 4 5 6 7 8 9 10 Company name América Móvil JBS SA Odebrecht SA Andrade AntarChile SA Empresas Itaú Unibanco Banco Cencosud SA Banco Bradesco SA Cemex SAB de CV SAB de CV Gutierrez SA COPEC SA Multiplo SA Revenues (2015) in US$ billion 51.9 41.1 33.5 28.3 18.2 18.2 17.8 15.5 13.2 13.1

Number of employees (2015) 195,475 238,000 128,000 223,000 17,398 14,922 90,320 140,474 92,861 43,000

Family Slim Batista Odebrecht and Gradin Andrade and Angelini Angelini Moreira Salles and Paulmann Aguiar Zambrano Gutierrez Souza Aranha Family shareholding or 61.4% 42.4% >82.0% >50.0% 63.4% 38.5% 44.9% 62.0% 48.4% 33.0% voting rights Public listed company Yes Yes No No Yes Yes Yes Yes Yes Yes Country Mexico Brazil Brazil Brazil Chile Chile Brazil Chile Brazil Mexico

Source: Global Family Business Index, University of St. Gallen, Center for Family Business.

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The top 3 The top 3 The top 37 family industry sectors are: countries are: businesses in Latin America 12 Generated Employ Realize Consumer products 14 and retail Mexico US$414.3b 2,308,427 US$344.2b in revenues (7.9% people (0.8% of of market of Latin America’s Latin America’s capitalization 5 12 GDP) workforce) Professional Brazil firms and services

Are, 78.4% are public 5 on average, Mining and 6 listed Chile 77.1 years old companies metals

Source: Global Family Business Index and Oxford Economics information; revenue and number of employee figures as of 2015; market capitalization as of 31 December 2016. Some interesting anniversaries Anniversary Company Family Industry Headquarters Country 130 Grupo Bal, SA de CV Baillères González Conglomerate Mexico City Mexico 130 Industrias Peñoles, SAB de CV Baillères Mining Mexico City Mexico 125 Grupo Casa Saba, SAB de CV Saba Pharmaceutical distributor Mexico City Mexico 75 Grupo México, SAB de CV Germán Larrea Mota-Velasco Mining Mexico City Mexico 60 Quiñenco SA Luksic Conglomerate Santiago Chile

Source: Global Family Business Index, University of St. Gallen, Center for Family Business.

Number of employees (2015) 195,475 238,000 128,000 223,000 17,398 14,922 90,320 140,474 92,861 43,000

Note: we define companies as family businesses when they are either public companies with a minimum shareholding or voting power of the owner family of 32%, or private companies with a minimum shareholding of the owner family of 50%. Revenue, number of employees and shareholding information as of 2015.

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Some recent M&A deals involving Latin American family businesses

December 2016 Suzano Papel e Celulose SA Brazil The Feffer family, which has a controlling share in the Brazilian pulp and paper producer Suzano Papel e Celulose SA, may consider splitting control in a sector consolidation deal. Walter Schalka, the group’s CEO, indicated in 2016 that Brazil’s pulp and paper industry is expected to face a consolidation wave, as excess capacity has cut prices to record lows in the last two decades. Recent speculations point to a possible merger between Suzano and Fibria Celulose SA. The latter has also been rumored to be considering a tie-up with Eldorado Brasil Celulose SA. To date, no official discussions have been revealed. Schalka noted that the combination of two or more pulp companies is just one of the ways to reshape the embattled sector. The sector’s woes have had a negative impact on Suzano’s financial results. In the third quarter of 2016, the company’s net revenue was US$639.9 million, marking a 27% decline year on year. July 2016 Ripley Corp SA Chile El Puerto de Liverpool SAB de CV, a Mexico-based operator of department stores, has entered into an agreement to acquire Ripley Corp SA — a Chile-based company engaged in the retail sales of apparel, accessories and home products — from the Calderón family for US$1.2 billion, at US$0.63 per share. The offer represents a premium of about 25% to Ripley’s closing price on the Santiago Stock Exchange on 5 July 2016. The transaction includes an option for El Puerto to buy additional shares five years after completion of the transaction. July 2016 Lupo SA Brazil Lupo announced a deal to buy rival underwear manufacturer Scalina. According to Lupo, the completion of the deal will take place after approval by Brazil’s Administrative Council for Economic Defense. The financial details of the transaction were not disclosed, but a knowledgeable source said that the value of the operation was about US$43.9 million. Scalina underwear is sold in Scala’s 100-plus franchised stores in malls throughout Brazil. The company employs more than 4,500 people and has three factories. Lupo, a family-controlled company, sells men’s and women’s underwear, as well as sports apparel and other accessories, in more than 300 shops. March 2016 Grupo Televisa de SA de CV Mexico Grupo Televisa de SA de CV is a listed Mexico-based media group involved in television, publishing and radio. It has agreed to acquire a 50% stake in Television Internacional SA de CV, the Mexico-based company that provides cable television, internet access, telephony services and bidirectional data transmission, from Multimedios Estrellas de Oro SA de CV, the Mexico-based media and entertainment company, for a consideration worth US$70.4 million. As a result of this transaction, Grupo Televisa will own a 100% stake in Television Internacional and will be able to exploit efficiencies and economies of scale among its five cable operations in Mexico, expanding the double- and triple-pay offerings of its subsidiary Izzi Telecom. March 2016 Inversora Carso SA de CV Mexico Inversora Carso SA de CV and Esther Koplowitz have agreed to acquire an undisclosed stake in Fomento de Construcciones y Contratas SA (FCC), via capital increase. Inversora Carso SA de CV, the Mexico- based investment company controlled by Carlos Slim, has interests in companies engaged in construction, environmental services, and the renewable energy sector. FCC, a listed construction company headquartered in Madrid, is engaged in similar sectors. The transaction is in line with FCC’s strategy of strengthening its capital and reducing its indebtedness.

Source: ThomsonOne.

Selected obituaries We take this opportunity to remember some of the famous family entrepreneurs who died in the last year:

3 February 2017 Business Coordinating Council, 28 October 2016 great blow to many of those Mexican bakery magnate called Servitje’s death “a great Roberto Gerardo Chwat, in the publishing world, and Lorenzo Servitje has died at loss for Mexico.” Lorenzo President of the Argentinian several took to social media the age of 98, after building launched Grupo Bimbo in 1945 publishing house Editorial to express their grief and his Grupo Bimbo into an with other partners, starting Sigmar SACI, was shot and pay tribute to the memory international snack and baked with 38 employees and 10 killed by robbers when of a man long considered goods empire that acquired delivery vehicles. The company returning to his home in Vicente an innovator in children’s brands including Entenmann’s, now operates in 22 countries López, Buenos Aires; a victim publishing. Sigmar was the Thomas, Freihofer’s and with 100 brands, and it of the growing crime wave first Argentinian publisher to Stroehmann. Juan Pablo recorded more than US$10.7 affecting the city’s suburbs. devote itself exclusively to the Castañón, the Head of Mexico’s billion in sales in 2015. Roberto’s death comes as a publication of children’s books,

Source: Factiva. Changes in leadership Camargo Corrêa SA América Móvil SA de CV Heinz-Peter Elstrodt appointed Camargo Correa’s Chairman — Grandsons of Mexican media mogul enter family business — October 2016 May 2016 Brazilian construction firm Camargo Corrêa has announced that Carlos Slim, the multimedia mogul owner of giant América Móvil, Heinz-Peter Elstrodt has been appointed as Chairman of the Board. has appointed two of his grandsons, Daniel and Rodrigo Hajj He will replace Décio Amaral, who was temporarily occupying the Slim, to the board of directors of some of his smaller companies. post following the exit of Vitor Hallack. Camargo Corrêa is involved Daniel and Rodrigo, both less than 25 years old, are the sons of in the lava jato corruption investigation and is trying to change the Vanessa, Carlos’s second-eldest daughter. Daniel was appointed to way it conducts its businesses. Heinz-Peter has previously worked the Board of Frisco Mining, and this was approved in 2015 by the for McKinsey and specializes in family businesses. shareholders (the Slim family holds 78% of the company’s shares). Rodrigo joined the Board of Soinmob Inmobiliaria Espanola, a real Source: Factiva. estate company owned by the Slim family and registered in Madrid.

Some of the oldest family businesses among the top 37 in Latin America

El Comercio Bacardi Limited Organización Votorantim Empresas CMPC Company Soriana SAB de CV Participações SA Founded 1839 1862 1905 1918 1920 Miró Quesada Bacardi heirs Soberón and Moraes Matte Family Bringas Media Spirits Grocery and Industrial Pulp and paper Industry department store conglomerate retail chain

Headquartered Lima Hamilton Monterrey São Paulo Santiago

Country Peru Bermuda Mexico Brazil Chile

Source: Global Family Business Index.

and is well known throughout LLC, Argentina’s second- Ruben served Bacardi for and as Director of Audit and the Americas. biggest oil company (behind nearly 20 years, and was Finance from 1989 to 1993. state-run YPF), and Forbes admired and respected for his Under his leadership, Bacardi 3 September 2016 magazine estimated that Carlos management approach and Limited experienced strong Energy mogul Carlos and Alejandro Bulgheroni his relationship with Bacardi’s growth in sales and earnings, Bulgheroni has died in the had a combined fortune of family shareholders. He was strengthened its corporate US, where he was hospitalized US$4.8 billion. appointed Chairman and governance, and oversaw the in June following a surgical CEO in 2000, and served as successful acquisition and procedure. According to 5 May 2016 Chairman for five years and integration of Grey Goose® local media, Carlos had been Bacardi Limited mourned as CEO from 2000 to 2003 vodka and Cazadores® 100% battling cancer for several the loss of Ruben Rodriguez, and again from 2004 to 2005. blue agave tequila into the years. The 71 year old, along retired Chairman and CEO of Before his appointment, Ruben Bacardi brand portfolio. with his brother Alejandro, Bacardi Limited, who passed served as the CFO for Bacardi owned Pan American Energy away aged 79 in Connecticut. Limited from 1993 to 2000

Family business in Latin America | Facts and figures

Family business growth accelerators in Latin America

The popular myth about family businesses is that they only grow slowly, over a long period. Our family business growth accelerators confound this myth, showing that family businesses have not only sustained growth but accelerated it too.

Revenues Revenues CAGR* Number of Number of Rank in the Global Family Owning or Headquarters Company (2012) in (2015) in 2012–15 employees employees Founded Business Index controlling family US$ billion US$ billion (average in %) (2012) (2015)

Andrade and Belo Horizonte, Brazil Andrade Gutierrez SA 1948 43 3.6 28.3 180.5 224,000 223,000 Gutierrez; >50.0%

270 Hamilton, Bermuda Bacardi Limited 4.5 6.0 15.5 6,198 6,281 Bacardi; 100.0% 1862

Source: Global Family Business Index, University of St. Gallen, Center for Family Business; Factiva; OneSource; CapitalIQ; PrivCo.

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Andrade and Belo Horizonte, Brazil Andrade Gutierrez SA 1948 43 3.6 28.3 180.5 224,000 223,000 Gutierrez; >50.0%

270 Hamilton, Bermuda Bacardi Limited 4.5 6.0 15.5 6,198 6,281 Bacardi; 100.0% 1862

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