Family businesses in Latin America | Facts and fgures The top 36 The top 3 family businesses industry sectors World’s in Latin America Diversifed industrial 500 products largest family Generate Realize Employ businesses US$466.1b a market more tHan 2.2 million capitalization of Retail and in revenues (7.7% of employees (0.7% of wholesale Latin America’s GDP) US$373.8b Latin America’s workforce) 7.2% (36) 72.2% are are located in Are, on average, Consumer public listed Latin America years old products companies 77.4 Sources: Global Family Business Index, University of St. Gallen, Center for Family Business, World Bank Some interesting anniversaries Anniversary Company Family Industry Headquarters Country Source: Global Family Business Index, University of St. Gallen, Center for Family Business 125 Fomento Económico Mexicano (FEMSA), Garza and Sada Beverages Monterrey Mexico S.A.B. de C.V. 90 Globo Comunicação E Participações S/A. MarinHo Media Rio de Janeiro Brazil The largest family businesses in Latin America 70 Grupo Bimbo Sa de CV Daniel Servitje Food processing Mexico City Mexico Montull The top 10 generated approximately U$305.4b to Latin America’s US$6.1t GDP in 2013 and employed more than 1.1 million people. The 70 Porto Seguro SA Garfnkel Financial services Sao Paulo Brazil largest family business by revenue is America Movil SA de CV, with US$61.6b. The largest family business by number of employees is Source: Global Family Business Index, University of St. Gallen, Center for Family Business Andrade Gutierrez S.A., with 251,996 employees. Rank 1 2 3 4 5 Rank 6 7 8 9 10 Company name America Movil Itau Unibanco Banco JBS SA Odebrecht S.A. Cencosud SA Company name Fomento Económico Metalúrgica Gerdau CEMEX SAB Grupo Bimbo Sa de CV S.A.C.I. SA de CV Multiplo SA Mexicano, S.A.B. SA de CV Falabella de C.V. Revenues (2013) in Revenues (2013) in US$b 61.6 57 43.2 41.3 20.9 US$b 20.2 18.6 15.3 13.8 13.5 Number of Number of employees (2013) 163,524 95,696 142,000 105,000 153,638 employees (2013) 209,232 46,000 43,087 125,416 90,438 Family Carlos Slim Moreira Salles, Villela, Setubal Batista OdebrecHt and Gradin Paulmann Family Garza and Sada Gerdau JoHannpeter Zambrano Daniel Servitje Montull Solari Family sHareHolding or voting 97%* 50%* 41.4% 82% 60.8% Family sHareHolding >50% 76.2% 33% 37% 41.4% rigHts (latter indicated by *) or voting rigHts (latter indicated by *) Public listed company Yes Yes Yes No Yes Public listed company Yes Yes Yes Yes Yes Country Mexico Brazil Brazil Brazil Chile Country Mexico Brazil Mexico Mexico Chile Source: Global Family Business Index, University of St. Gallen, Center for Family Business Note: we defne 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%. 116 | EY Family Business Yearbook 2015 EY Family Business Yearbook 2015 | 117 Changes in leadership Some recent M&A deals involving Latin American family businesses Cemex January 2015 Grupo Televisa de S.A. de C.V. May 2014 — Cement giant responds swiftly to fourth-gen CEO death Mexico The listed Mexico-based media group, involved in television, publishing and radio, has acquired Cablevision A swift change of leadership at Mexican company Cemex followed Just four days after his death, Cemex released a statement Red S.A. de C.V., the Mexico-based telecommunications company that provides video, data and telephony the sudden death of its fourth-generation Chief Executive and announcing that Rogelio Zambrano Lozano, 57, cousin to the services, for a total consideration of US$201m. The transaction is in line with Televisa’s strategy to set up a Chairman. Lorenzo Zambrano died from a heart attack in Madrid, late CEO and a Cemex board member, would become Chairman of telecommunications company in Mexico that also competes internationally. leaving directors with the task of replacing the man responsible for the board. January 2015 transforming Cemex’s regional operation into a global business. Cemex SAB de CV (Cemex) Switzerland Mexico’s Cemex acquired the cement operations of Holcim Ltd (Holcim), a Zurich-based manufacturer and wholesaler of cement, aggregates, clinker, concrete and ready-mix concrete. The transactions had a combined value of US$56.78m in cash. November 2014 BRF SA Kuwait Brazilian food company BRF acquired a 75% interest in the frozen food distribution business of Al Yasra Foods, Some of the oldest family businesses among the top 36 in Latin America a wholesaler of frozen food products, for US$160m. May 2014 Lojas Americanas SA and TiGer Global ManaGement LLC Grupo BAL, S.A. Industrias S.A.C.I. Falabella Fomento Económico Grupo Casa Saba Company de C.V. Peñoles SAB de Mexicano (FEMSA), SA de CV Brazil These two organizations signed an equity purchase agreement to acquire a 37.45% stake of B2W Companhia CV S.A.B. de C.V. Digital. Lojas Americanas SA, the listed Brazil-based company headquartered in Rio de Janeiro, operates as a retail chain. Tiger Global Management LLC is a hedge fund sponsor and private equity frm headquartered Founded in New York. B2W Companhia Digital, the listed Brazil-based company headquartered in Rio de Janeiro, is 1887 1887 1889 1890 1892 an internet retailer. The deal sees 95,200,000 equity shares, representing a 37.45% stake of enlarged share Gonzalez capital, acquired at a cash offer price of BRL25 per share. The transaction is therefore valued at US$1.01t. Family Baillères Solari Garza and Sada Saba Baillères May 2014 Grupo Bimbo SAB de CV (Grupo Bimbo) Mining and Canada Mexico’s Grupo Bimbo acquired the entire share capital of Canada Bread Co Ltd (Canada Bread), an Etobicoke- Industry Diversifed Retail Beverages Health care chemicals based producer and wholesaler of four-based products, from Maple Leaf Foods Inc. (Maple) (90%) and other shareholders (10%) for US$65.478 in cash per share, or a total value of US$1.66b, via scheme of arrangement. Headquartered Mexico City Mexico City SantiaGo Monterrey Mexico City On completion, Canada Bread common shares were delisted in the Toronto Stock Exchange. Country Mexico Mexico Chile Mexico Mexico April 2014 Alicorp SA Source: Global Family Business Index, University of St. Gallen, Center for Family Business Peru The listed Peru-based food company acquired Global Alimentos, the Peru-based producer of cereal-based products, for a total of US$107m. Global Alimentos is engaged in the production and sale of cereal- based products under the brand Angel and Molino Saracolca SAC. Alicorp is aiming to increase the global consumption of cereal-based products and take advantage of Global Alimentos’s product portfolio. January 2014 Odebrecht EnGenharia Ambiental SA Brazil The waste disposal company and a subsidiary of conglomerate Odebrecht S.A. acquired a water treatment plant from Braskem S.A., the listed producer of petrochemicals and thermoplastic resins, for a consideration of US$132.7m. All parties are based in Brazil. Selected obituaries We take this opportunity to remember some of the famous family entrepreneurs who died in the last year. 14 September 2014 24 AuGust 2014 19 July 2014 business, where he was in charge of 15 July 2014 12 May 2014 Isidoro Alvarez, Chairman of department Antonio Ermirio de Moraes, the Brazilian Norberto Odebrecht, who turned a local transportation and warehousing. He Moise Safra, the Brazilian banking Lorenzo H. Zambrano, the Mexican store chain El Corte Ingles, died on billionaire and former Chairman of family- Brazilian engineering frm into Latin turned over the chairmanship of his billionaire, died aged 79. Safra was ranked businessman who turned his family- 14 September, 2014, aged 79. Alvarez owned Grupo Votorantim, Latin America’s America’s biggest construction company, company to his son Emilio in 1998, and the second-wealthiest entrepreneur in owned cement company Cemex into an was the majority shareholder of the ffth-largest diversifed industrial died in Salvador, Brazil, aged 93. Born focused on the Odebrecht Foundation, an the Latin American country, according organization spanning fve continents, Madrid-based retail giant, which had conglomerate, died in Sao Paulo, Brazil. in 1920 to a family of German lineage, educational and environmental non-proft to Forbes, with a combined net worth of died in Madrid aged 70. He exemplifed a annual revenues of nearly US$19b at the He was 86. Together with his two siblings Norberto studied engineering and started organization. His grandson Marcelo is Chief US$20.1b. generation of Mexican business leaders time of his death. After taking over as and the three children of his deceased out working for his father’s construction Executive Offcer of Odebrecht SA. who embraced globalization. Chairman of El Corte Inglés in 1989, he older brother Jose Ermirio de Moraes built the family-owned retailer into one of Filho, they were ranked as Brazil’s third- Europe’s largest department store chains. richest family in May, worth over US$15b. 118 | EY Family Business Yearbook 2015 EY Family Business Yearbook 2015 | 119.