Family business in | Facts and figures Some recent M&A deals involving Latin American family businesses Introduction January 2014, December 2013, Brazil November 2013, Honduras Family businesses form the backbone of Latin America’s new family businesses. Governments in the region are Odebrecht SA Itau Unibanco Holding Cementos Argos SA economy, comprising more than 80% of private sector increasingly realizing the importance of family businesses to acquired Distribuidora de Agua Triunfo, a acquired Banco Citicard SA (Citicard) for of Colombia, a unit of Inversiones Argos economic activity on the continent. Much of the region has their economies, but family businesses themselves want Triunfo-based water utility company, for BRL2.767b (US$1.37b). Itau is controlled SA, acquired a majority stake in Lafarge experienced strong growth in the last 10 years, and this has more help, particularly with their tax burdens. BRL315m (US$131.56m). Odebrecht is by the Moreira Salles family. Cementos for HNL6.23b (US$305.58m). fueled a great deal of entrepreneurial activity, giving rise to controlled by the Odebrecht and Gradin Argos SA is controlled by the Jaramillo families. family. The importance of family businesses in ily t fam bus Latin America es in rg es October 2013, Brazil April 2013, Mexico a s l e s JBS SA America Movil 0 acquired Seara Brasil Business Unit, Grupo Zenda acquired Corporacion de Medios Integrales SA de 5 of Uruguay and Excelsior Alimentos SA. The three CV, a provider of advertising services, for MXN1.66b 85% transactions had a combined value of BRL5.85b (US$131.44m). America Movil is owned by the Slim family. 2 (US$2.72b). JBS is controlled by the Batista family.

of the companies in Latin America are s

’ family-owned businesses. Sources: ThomsonOne.com, Mergermarket.

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o Generate of Latin America’s GDP Changes in leadership W 60% of the workforce in Latin 14 February 2014, Brazil 25 March 2013, Brazil Employ 70% became Europa President. The other old America and the Caribbean Klein family puts faith in Nanini head available to her was Carlos Quioshi Arezzo gains new blood of the companies are managed by the Michael Klein, the son of Casas Bahia Yasumura, Financial and Administrative This year, after almost 40 years leading the 47% first generation founder Samuel Klein, still works from what Director. Between 2009 and 2011, sales at firm he founded, Anderson Birman, aged 59, was once the HQ of Brazil’s biggest electro- Europa rose 5% per annum. The firm has passed the reins at Arezzo over to his son of the companies are managed by the domestics chain in central Sao Caetano do downsized its Sao Paulo HQ this year, and Alexandre, aged 36, and moved upstairs to 29% second generation Sul (SP). There, he is currently looking for new executive roles such as HR director the boardroom. In the 1990s, the firm went 6% are managed jointly by the first and of these companies are new businesses in which to invest part of his have been created over the last two years. from being just a manufacturer to becoming 14% second generations patrimony of BRL6b (R$2b in disposable Online sales should start up in 2014. Latin America’s number one women’s located in Latin America income at present, BRL4b in property). He footwear chain. In 2007, Arezzo Source: Family Business Magazine. are led by the third or fourth generations 10% is attracted by the retail industry, but has 28 March 2013, sold 25% of its capital to an investment fund. And in 2011, it debuted on the stock yet to make any firm decisions. But he has Quinenco boss passes away and contracted Luiz Nanini, a former EY partner, market. Before joining the firm, Alexandre brother takes over Some of the oldest family businesses in Latin America to be the director of a new Klein family set up Schutz, a walking boot brand, which business. Guillermo Luksic Craig, President of generated revenues of BRL120m, and Quinenco, died this year from lung cancer. which he brought along with him into the He entered the family business as the family business. The group also boasts the 4 September 2013, Brazil Company Ypióca Group Tardan Hermanos Rotermund Klabin Dierberger Óleos manager of the Forestal Colcura in 1977. brands AnaCapri and Alexandre Birman. Sucesores SA S/A Indústria E Essenciais S/A. Female hand on the tiller at Europa Later, he joined Quinenco as Deputy Source: EY research, based on Factiva. Comércio Manuella Curti de Souza, the daughter of General Director and later moved up to Founded Europa founder Dacio Mucio de Souza, lost General Director. In 1982, aged only 26, he her father as well as her brother over a took over as the President of the holding 1846 1847 1877 1890 1893 period of eight months when she was in her company, replacing his father. Diagnosed Family Telles Tardan Rotermund Klabin Dierberger 20s. Manuella, her mother and her sister in May 2012, his health turned for the Nathalia decided to keep the family business worse in February. He met with his two Industry Paints and Beverages Clothing, hats Specialized Paper products going. The firm, founded in 1984, is Brazil’s brothers to begin preparations for life and adhesives and caps design leading water filter manufacturer with business without him. The trio decided services annual sales of BRL200m. Manuella and that Andronico would take on the main Headquartered Maranguape Ciudad de Mexico Sao Leopoldo Sao Paulo Sao Paulo her all-female family received the backing responsibilities and that the third generation, of Company Partner and Industrial Director including Nicolas, Guillermo’s only son, Country Brazil Mexico Brazil Brazil Brazil Antonio Carlos Camargo, who stayed on should become increasingly involved. Source: EY research, based on Dun & Bradstreet data. at the firm, as Manuella, now aged 29,

104 | EY Family Business Yearbook 2014 EY Family Business Yearbook 2014 | 105 The largest family businesses in Latin America The top 10 family businesses generated approximately US$290b out of Latin America’s US$5.3t GDP in 2012 and employ almost one million people. Rank 1 2 3 4 5 6 7 8 9 10 America Movil JBS S.A. Odebrecht S.A Itau Unibanco Votorantim Cencosud S.A. S.A. SAB de Cosan Limited Grupo Bimbo Company name SAB de CV Holding S.A. Participacoes S.A. CV SAB de CV

Revenues (2012) in US$m 61,574 43,059 42,428 38,929 22,335 18,803 18,476 15,326 14,800 13,789

Number of employees (2012) 161,250 140,000 159,036 96,977 64,200 154,879 45,000 43,766 45,000 12,568

Odebrecht and Moreira Salles and Family Slim Batista Ermirio de Moraes Paulmann Gerdau Johannpeter Zambrano Mello Servitje Gradin Setubal

Family shareholding or voting rights 97%* 41.4% 82% 50%* 100% 60.8% 41.2% 33% 38.3% 37% (latter indicated by *)

Publicly listed company Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes

Country Mexico Brazil Brazil Brazil Brazil Chile Brazil Mexico Brazil Mexico

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 — Latin America Some interesting anniversaries Anniversary Company Family Industry Headquartered Country

S.A.C.I. Falabella Department stores Chile 125 Falabella 1889–2014 Camargo Correa Camargo Specialty Sao Paulo Brazil 75 SA Construction Trade Unemployment Inflation rate 1939–2014 Contractors 2012 2012 Odebrecht Odebrecht Architecture and Rio de Janeiro Brazil 70 Engineering 8% 1% 1944–2014 4. GDP per capita 4. Source: EY research, based on Dun & Bradstreet data. Latin America Latin America growth rate Selected obituaries 2012 We take this opportunity to remember some of the famous family entrepreneurs who died in the last year: % of the total labor force 8% Consumer price index 5 January 2013 20 April 2013 Philip Lehner died aged 88. He helped build his father’s business, Dirce Navarro de Camargo died aged 100. She was Brazil’s richest 1.

now called Leigh Fibers, into one of the world’s biggest woman and the widow of Sebastião Camargo, the founder of the Latin America manufacturers in the reprocessing of textile waste and fiber private conglomerate Camargo Correa. by-product. 1 November 2013 27 March 2013 Manuel Jorge Cutillas helped turn the family business, Bacardi, into change from a year earlier Guillermo Luksic Craig was the President of Quinenco. He died a global brand. Under Cutillas’s stewardship, it became one of the aged 57. world’s largest private spirit companies. He died aged 81. Source: The World Bank and the International Monetary Fund.

Source: EY research, based on Factiva.

106 | EY Family Business Yearbook 2014 EY Family Business Yearbook 2014 | 107