The top 500 family businesses in the world

[Pages:3]The top 500 family businesses in the world

David Bain

David Bain

David Bain is the founder of Family Capital, a specialist news analysis website that specializes in global family businesses, which was founded in last year. He has been commentating on family business for more than ten years, having edited Campden Family Business magazine for five years. David has worked for Dow Jones, The Economist Group, Euromoney and Schroders Investment Management. He is a graduate of the London School of Economics, University of London.

182 | EY Family Business Yearbook 2015

The first ever list of top family businesses shows how they drive global economic growth and employment.

The top 500 family businesses in the world contributed US$6.5t to global GDP in 2013 -- more than the combined contribution made by the French and German economies. In the same year, they employed 20.9 million people, greater than the entire workforce of South Africa.

These are among some of the illuminating facts revealed by the first ever definitive ranking of the 500 largest family businesses in the world. The Global Family Business Index, published by

compiled by St Gallen University, with the support of EY, ranks the world's biggest family businesses in terms of revenue. The ranking also quantifies who owns the business, how much they own, how many people they employ and when the business was founded.

The index underlines the sizeable role that family businesses play in the world economy. In 2013, the top 500 contributed more than half of what the entire Fortune 500 companies did in terms of revenues.* But when it comes to employment, the 500 family businesses on the index employed more than twothirds of those employed by the Fortune 500.* So family businesses generate

more employment than their non-family business counterparts.

Family businesses are, of course, found all around the world. But nearly half of the 500 (238) are based in Western Europe, with the big three Eurozone economies -- Germany (94), Italy (31) and France (28) -- home to 153 of them. The single biggest number is for the US, home to 101 of the top 500. Asia-Pacific has 60 businesses on the list, with India's contribution by far the biggest number at 25.

Latin America is home to 36 family businesses on the list, with Mexico and Brazil contributing 15 each. The Middle East, including Turkey and Israel, had 14, with 6 of them in Turkey. And subSaharan Africa was represented by one business, in South Africa.

Ninety of the 500 are in the retail and wholesale sectors, with diversified industrial holding companies and consumer goods businesses accounting for 85 and 76 respectively. Interestingly, few top 500 family businesses are found in the banking (11) and technology (12) sectors.

"The Global Family Business Index underlines how important family businesses are to the world economy," says Thomas Zellweger, Professor of Business Administration at the University of St Gallen and the lead analyst for the Index. "Indeed, the fact that more than 40% of the 500 have been around for at least four generations is testament to the longevity and stability of the family business model. Many on the ranking are exemplars of patience capital, which is prevalent throughout the family business world and is crucial to generating secure employment."

Other key facts from the rankings include:

? Forty-four percent of the 500 are owned by either the fourth generation or older. This throws doubt on the conventional wisdom that most family businesses last just three generations or, as the often-cited old adage goes: from shirtsleeves to shirtsleeves in three generations.

? Many of the 500 are household names, such as Wal-Mart, BMW and IKEA. But few people view these businesses as family owned, despite the fact that

almost all of them have been around for at least 30 years.

? The split between private and public businesses is pretty much even, with 260 publically listed and the rest 100% privately owned.

? In per capita terms, Switzerland has by far the most big family businesses, with 17, followed by the Netherlands with 16.

? The 10 largest family businesses have a combined revenue of US$1.74t. This is more than the size of the world's 12th largest economy, Australia (GDP of US$1.56t in 2013).

? Although there are only a few family businesses in banking, there are many in asset management, with the sector accounting for 34 of the 500.

? The capital-intensive automotive sector also accounts for a significant percentage of the 500. Big names in the sector, such as Volkswagen, BMW, Ford and Peugeot, are joined on the list by a number of lesser known automotive component companies.

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The top 500 family businesses in the world

Beiersdorf AG

C&A Mode AG De Agostini The GAP

Lego A/S Edizione Srl Wipro Ltd.

Mercadona Sa

Prada SpA Wal-Mart Stores, Inc. Thomson Reuters Corp

Hallmark Cards Incorporated

Tengelmann Warenhandelsgesellschaft KG

S. C. Johnson & Son Inc. Hermes International

IKEA GroupThe Hershey Co. Kohler Co. Miele & Cie. KG

Groupe Auchan Heineken Holding N.V. Deichmann SE

Volkswagen AG Levi Strauss & Co. El Corte Ingles Sa

Porsche Automobil Holding SE Mccain Foods Group Inc

Roche Holding AG (Roche Group)

H & M Hennes & Mauritz Kotak Mahindra Bank Ltd

Bayerische Motoren Werke AG (BMW)

HTC Corp.

Mars Incorporated

PEUGEOT SA

Tetra Laval International SA Ferrero International Sa

Cathay Pacific Airways Ltd. E. & J. Gallo Winery

Ford Motor Company

Cargill, Incorporated Majid Al Futtaim Holding LLC

LVMH Mo?t Hennessy Louis Vuitton SA

Tata Motors Limited

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"When the University of St Gallen started to compile the Global Family Business Index, EY decided to lend its support," says Peter Englisch, Global Family Business Leader at EY. "We felt there was a lack of clear understanding about the magnitude of the role that family companies play in the global economy. I'm confident that the index will become the definitive benchmark of the size and importance of the sector. But like any business, families running corporations often have their own set of challenges and risks, including succession, family and corporate governance, financing, entrepreneurship and professional management."

Methodology

For the ranking, a family business is defined as follows: for a privately held business, the family must control more than 50% of the voting rights; for a publicly listed business, the family must control at least 32% of the voting rights.

It is generally assumed that 30% of the votes in a publicly listed business are sufficient to dominate the general assembly. This is because roughly 60% of the votes are present in the general assembly. Nevertheless, the Family 500 decided to be more conservative and used a 32% cut-off for the classification of publicly listed businesses.

*The Fortune 500 total revenues for 2013 were

US$12.2t and the total number employed by them was 26.4 million. All GDP and employment figures used for

comparison are from the World Bank databank.

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The top 500 family businesses in the world

Global Family Business Index top 25

The Global Family Business Index comprises the largest 500 family firms around the globe. It provides impressive evidence of the economic power and relevance of family firms in the world. The index is compiled by the Center for Family Business at the University of St. Gallen, Switzerland, in cooperation with EY Global Family Business Center of Excellence.

We present you here the top 25 by revenue, and the oldest 25 family businesses. We encourage you to find more interesting details about the top 500 family businesses on .

The top 25 by revenue

Rank Company Name

1 Wal-Mart Stores, Inc. 2 Volkswagen AG 3 Berkshire Hathaway, Inc. 4 EXOR SpA 5 Ford Motor Company 6 Cargill, Incorporated 7 Koch Industries Inc. 8 Bayerische Motoren Werke AG (BMW) 9 Schwarz Group 10 Groupe Auchan 11 Arcelor Mittal 12 LOUIS DREYFUS HOLDING B.V. 13 Reliance Industries Limited 14 PEUGEOT SA 15 Comcast Corp. 16 CASINO GUICHARD-PERRACHON 17 America Movil SA de CV 18 Itau Unibanco Banco Multiplo SA 19 The Long & Foster Companies, Inc. 20 Roche Holding AG (Roche Group) 21 Enterprise Products Partners LP 22 AP Moeller/Maersk Group 23 Continental AG 24 JBS SA 25 Christian Dior SA

HQ Location

United States Germany United States Italy United States United States United States Germany Germany France Luxembourg Netherlands India France United States France Mexico Brazil United States Switzerland United States Denmark Germany Brazil France

Sector

Latest reported Revenue (US$b)

Retail and Wholesale Automotive

476.3 261.6

Asset management

182.2

Asset management Automotive Retail and Wholesale Diversified industrial products

151.1 146.9 136.7 115.0

Automotive

101.0

Retail and Wholesale

89.4

Asset management Diversified industrial products

85.5 79.4

Asset management

74.3

Oil and gas

72.0

Automotive Media and entertainment Retail and Wholesale Telecommunications

71.8 64.7 64.6 61.6

Banking & capital markets Real estate and construction

57.0 56.0

Life Sciences

50.5

Oil and gas

47.7

Other sectors

47.4

Automotive

44.3

Consumer Products

43.2

Consumer Products

42.0

Founding Year

1962 1937 1955 1927 1903 1865 1940 1916 1930 1961 1989 1851 1966 1810 1963 1898 2000 2008 1968 1896 1968 1904 1871 1953 1946

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The 25 oldest family businesses

Founding

Year

Company Name

HQ Location

EY sector

Latest reported Revenue (US$b)

1610 Takenaka Corporation

Japan

Real Estate and construction

9.7

1668 1704 1736 1756 1786 1792 1799 1804 1805 1806 1807 1810 1816 1820 1822 1828 1828 1834 1835 1837 1837 1839 1841 1841

Merck KGaA Wendel SA Wadia Group of Companies Franz Haniel & Cie. GmbH Molson Coors Brewing Co. Jeronimo Martins SGPS SA Thomson Reuters Corp Schroders plc DIeteren SA J. B?nting Beteiligungs AG Bucher Industries AG PEUGEOT SA Swire Pacific Ltd Wieland-Werke Aktiengesellschaft Bollor? SA Hutchison-Whampoa Ltd. Globus Holding Gmbh & Co. Kg Ayala Corp Bertelsmann SE & Co. KGaA Hermes International Bonnier AB B. Braun Melsungen Aktiengesellschaft Wilh. Werhahn KG C&A Mode AG

Germany France India Germany United States Portugal United States United Kingdom Belgium Germany Switzerland France Hong Kong Germany France Hong Kong Germany Philippines Germany France Sweden Germany Germany Germany

Life Sciences Diversified industrial products Diversified industrial products Diversified industrial products Consumer Products Retail and Wholesale Media and entertainment Asset management Automotive Asset management Diversified industrial products Automotive Real Estate and construction Diversified industrial products Other Sectors Asset management Retail and Wholesale Real Estate and construction Media and entertainment Consumer Products Media and entertainment Life Sciences Diversified industrial products Retail and Wholesale

14.2 8.5 2.8 4.8 4.2

15.7 12.7

2.8 7.3 2.8 2.9 71.8 6.6 3.7 14.4 33.0 7.2 3.2 21.7 5.0 4.2 6.9 3.9 8.8

No. of employees (Bloomberg)

7,335 38,154 71,985 15,000 11,525

9,250 76,810 57,800

3,304 27,246 10,700 11,890 207,287 75,000

6,790 53,608 260,000 17,000 44,000 111,763 11,037

9,226 48,264

9,340 35,672

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