Family business in the Middle East | Facts and figures

Introduction Some recent M&A deals involving Middle Eastern family businesses If the ancient Egyptians are considered the first example of a MENA are a big contributor to the region’s economy. Here sophisticated civilization on Earth, then it could be said that are some interesting facts about them: January 2014, family businesses may well have their origins in the Middle October 2013, Bahrain March 2014, UAE East. Whether that is the case or not, family businesses in Fawaz Abdulaziz Kanoo Co BCD Travel The importance of family businesses in Alhokair & Co Yusuf Bin Ahmed Kanoo Co acquired has increased its ownership stake in its the Middle East acquired the assets of Blancoshop SL, the entire share capital of Thomas Cook long-time partner in Dubai. Founded in st family b a Madrid-based owner and operator Overseas Ltd, a -based travel 1957, Al Rostamani is one of the United ge us of women’s clothing stores, for €40m agency, from Thomas Cook Group PLC. Arab Emirates’ largest and oldest family r in business conglomerates. The company la e (US$54.68m). Blancoshop had first Concurrently, Yusuf Bin Ahmed Kanoo s announced in June 2013 that it was Co acquired the entire share capital of operates as BCD Travel LLC for its s 0 e seeking a buyer. Cortefiel was named as Thomas Cook Lebanon SAL. The two business travel. First partnering with s another potential bidder. transactions had a combined value of BCD Travel in 2006, the Dubai travel 5 90% EGP72.06m (US$10.46m) in cash. agency maintains three offices in Dubai 2 of the companies in the Middle East are and one in Abu Dhabi. In addition, the

s agency maintains onsite teams of travel ’ family-owned businesses. January 2014, Kuwait

d consultants at multiple corporate offices. l

r of the region’s GDP, Alshamel Int’l Holding o Generate 80% approximately acquired an 80% interest in Net Tours &

W Travels LLC, a Dubai-based travel agency, for of private sector an amended value of AED11m (US$3m). Constitute 75% economic activity Sources: ThomsonOne.com, Mergermarket. of the labor force in the Cooperation Council for Employ 70% the Arab States of the Highlights from the Middle Eastern family business sector in the last year Gulf region — more than 67 million employees IPOs and the family business Damac Real Estate Development 2% of the oil producing of these companies are Control 98% companies operating in Public listings of family businesses are becoming much Among the IPO highlights was that of Damac Real Estate Source: Family Business Magazine. located in the Middle East the Gulf region more popular in the Middle East. According to EY’s Development in November 2013, which raised US$348m quarterly IPO update, family and non-family businesses on the London Stock Exchange. The residential, leisure raised US$3b through public listings in 2013, up 64% in and commercial property developer is part of Damac volume and 51% in value terms compared with 2012. Group, which is controlled by the UAE-based Sajwani Some of the oldest family businesses in the Middle East Source: EY research, based on Factiva. family.

Company Haji Abdullah W J Towell & Co Khimji Ramdas El Rashidi Yusuf Bin Ahmed Alireza and Co LLC LLC El Mizan Kanoo Holdings Ltd. Confection Co. Founded 1845 1866 1870 1889 1890 Some interesting anniversaries Anniversary Company Family Industry Headquarters Country Family Alireza Sultan Khimji El Rashidi Kanoo El Rashidi El El Rashidi Confectionery Cario Egypt Industry Travel Trading Retail Confectionary Holding 125 Mizan Confection companies 1889–2014 Hammoudeh Hammoudeh Animal feed Jordan Headquartered Muscat Muscat Cairo Manama 50 Group 1964–2014 Country Saudi Arabia Oman Oman Egypt Bahrain

Source: EY research, based on Dun & Bradstreet data. Source: EY research, based on Dun & Bradstreet data.

124 | EY Family Business Yearbook 2014 EY Family Business Yearbook 2014 | 125 The largest family businesses in MENA The top 10 generated approximately US$88.5b to MENA’s US$1.5t GDP in 2012 and employ nearly 221,740 people. The largest family business by revenue is Saudi Binladin Group, and the largest by number of employees is Mohammed Abdulmohsin Al Kharafi & Sons Co. Rank 1 2 3 4 5 6 7 8 9 10 Company name Saudi Binladin Savola Group Saudi Oger Ltd. Majid Al Futtaim Dallah Albaraka Mohammed Ethiad Airways Orascom Group Al Rajhi Banking Abdul Latif Group Company Group Group Abdulmohsin Al PJ S C Investment Jameel Co Ltd Kharafi & Sons Co Corporation

Revenues (2012) in US$m 30,000 27,391 8,000 5,880 5,328 5,000 4,084 4,023 4,002 3,795

Number of employees (2012) 55,715 7,000 35,000 18,850 60,000 120,000 9,038 20,000 9,037 7,100

Family Binladin Al-Muhaidib, Hariri Al Futtaim Kamel Al Kharafi Al Nahyan Sawiris Al Rajhi Jameel Al Subeaei

Publicly listed company No Yes No No No No No Yes Yes No

Country Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Kuwait United Arab Emirates Egypt/Switzerland Saudi Arabia Saudi Arabia

Source: EY research, based on Dun & Bradstreet, dnb.com. 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%.

Key economic numbers — Middle East Selected obituaries We take this opportunity to remember some of the famous family entrepreneurs who died in the last year: Inflation rate 15 May 2013 operations across Saudi Arabia, Qatar, Abu Dhabi and Kuwait. Mr. 2012 Abdulrahman Alkhorayef was the Chairman of the Board of Nass is survived by six sons and three daughters, who all play vital Directors of Al Khorayef Group. The diversified group based in roles within the group. is involved in manufacturing, petroleum, trading and 30 January 2014 5% investments. He died aged 68. Unemployment MENA Dr. Abdullah Omran Taryam, one of the founding fathers of 7. journalism in the United Arab Emirates (UAE) has passed away at the 2012 7 September 2013 age of 66. He was a former Minister of Education and Minister of 8% GDP per capita Ganesh Srinivasan, the -based Indian entrepreneur, died aged Justice. He and his brother, the late Taryam Omran Taryam, MENA 58. He was the General Manager of Gulf Incon, which he had set up established Al Khaleej newspaper in 1970, which became the Dar Al 4. growth rate with a prominent local business group in 1980. Khaleej group. The company now produces six publications. Consumer price index 2012 26 January 2014 10 February 2014 6% Abdulla Nass, the founder and chairman of Nass Group, died aged Sheikh Mohammed Al-Abdullatif was the Chairman of the Board of % of the total labor force MENA 77. He initially started his career by working as an assistant in a Directors of AlGhazali Group. The Riyadh-based AL Ghazali Group is 1. construction company in Saudi Arabia before returning to a retail trading company, involved in luxury and brand watches. He Bahrain in 1963 to establish the group. The company is a leading died aged 90. integrated solutions provider for the construction industry in Bahrain and the Gulf, employing around 8,000 people. It has an annual revenues of BD200m, with headquarters in Bahrain and Source: EY research, based on Factiva. change from a year earlier

Sources: The World Bank and the International Monetary Fund.

126 | EY Family Business Yearbook 2014 EY Family Business Yearbook 2014 | 127