History knows hundreds of examples of how a small family business grew to the size large companies with millions of revolutions. True, today many well-known brands have changed owners, who owned them for 100 years or more. Thus, Tissot, Chopard and Adidas were once family businesses.
Our today's Top 5 contains the most successful family companies, whose owners manage to maintain control over the business.
5. Estée Lauder Companies Inc
This American company is the world's most famous cosmetics manufacturer and owner of such brands as Estee Lauder, Clinique, M A C, Donna Karan, Tommy Hilfiger, American Beauty. The company was founded in 1946 by Estée Lauder, who stood at the helm of her business for almost 50 years.
Today, the Lauder family owns more than 83% of the company's shares. Estée Lauder Companies Inc. is an employer of 32 thousand people, and the company's annual profit exceeds $210 million.
4. Siemens AG
The transnational concern is one of the world's largest manufacturers of electronics, transport, power equipment, and lighting equipment. The company's shares are included in the base for calculating such important stock indices as DAX, S&P, Dow Jones.
The founder of the company in 1847 was the German engineer Werner Siemens, who was financially supported by his cousin Johann Georg Siemens. The heirs of Werner Siemens turned their grandfather's company into a powerful corporation represented in 190 countries around the world. Today, Siemens employs 405 thousand people.
3. Ford Motor Co
The American automobile company is included in the Fortune 500 and Global 500 ratings. The company was founded in 1903 by Henry Ford, who became famous for being the first to use a conveyor belt in the car assembly process.
Ford Motor Co. has been owned by the Ford family for over 100 years. Ford employs 350,000 people and generates annual revenues of more than $160 billion.
2. Walmart Stores
The American retail company operates the world's largest retail chain under the Walmart brand. The company is owned by the Walton family, and the company's son, Robson Walton, is chairman of the board of directors.
The Walmart network includes more than 10 thousand stores in 27 countries. The company's annual revenue is more than $200 billion. The total number of employees is more than 2 million people.
1.Samsung Group
One of the world's largest concerns traces its history back to a rice flour production workshop opened in the 1930s by Korean Lee Byung-Chol. There is a legend that Li Ben found money to start a business from the ruins of a burnt house.
Samsung literally means “three stars”. It is believed that the company was named after Lee Byung-chul's three sons, the youngest of whom, Lee Kun-hee, was the head of the family business for a long time. Despite his retirement, Lee Kun-hee is the owner of a large share of the company's shares and is also the richest person in South Korea.
Today, the annual turnover of the Samsung group of companies is more than $200 billion.
Credit Suisse (CS) has conducted extensive research into family businesses. The result was a ranking of the 900 largest family businesses. The list includes companies whose shares are traded on financial exchanges and whose capitalization exceeds $1 billion. You can also find companies in which at least 20% of the shares are owned by families.
“In more developed markets, we see more fragmented ownership,” the authors of the CS study emphasize. “Most families sell their shares over time. According to frequently cited statistics from the Family Business Institute, only a third of family businesses go to the second generation of the founding family, 12% to the third, and only 3% to the fourth.”
Some companies on the list have been controlled by families for more than one generation. Another hallmark of family businesses is family issues. The most common phenomenon is civil strife between relatives, which newspaper reporters are happy to describe. The list of sins is very long: from giving bribes to the right people to collaborating with Hitler.
Below is a list of CS 15 families that own the largest businesses in the world.
15. Gou Family
Company - Foxconn
Industry - information technology
Country - Taiwan
Market capitalization – $49 billion
Foxconn's official name is Hon Hai Precision. The company produces electronic parts and components for such giants as Apple, Dell, Microsoft, Hewlett-Packard, etc. The company was founded by Terry Gow. In 2012, a loud scandal broke out. The New York Times investigated and concluded that workers at Foxconn factories work in appalling conditions and have a high suicide rate.
14. Kwoka's family
Company - Sun Hung Kai Properties
Industry – finance
Country – Hong Kong
Market capitalization – $49 billion
The Kwoki brothers are billionaires thanks to construction company, created by their late father Kwok Tak Seng. There have been many scandals associated with the Kwok family lately. Walter Kwok left the family company last year after a major falling out with brothers Thomas and Raymond. Thomas also resigned later that year as a result of a corruption scandal. He was found guilty of bribing Hong Kong officials. Currently, Raymond holds the position of Chairman of the Board of the Company. His sons Edward and Adam work in the family firm and occupy senior positions. The main shareholder is Siu Hing Kwok, mother of Walter, Thomas and Raymond. She reconciled the brothers and headed the company’s board from 2008-11.
13. Mckessons
Company – McKesson
Country: USA
Market capitalization – $55 billion
The company was opened by John McKesson and Charles Alcott in 1833. Today it is one of the largest American companies, a leader in the production and trade of medicines and medicines, as well as in the field high technology in healthcare. McKesson descendants still own a significant share of the company's shares.
Company - SoftBank
Industry – telecommunications
Country – Japan
Market capitalization – $72 billion
Company founder Masayoshi Son is considered the second richest person in Japan thanks to the huge telecommunications company he created in 1981. In addition to the divisions dealing with cell phones, the Internet and e-commerce SoftBank owns 80% of Sprint and 32% of Alibaba. Song is said to be retiring and is grooming a successor.
11. Tata Family
Company - Tata Consultancy Services
Country – India
Market capitalization – $80 billion
Just like most other subsidiaries of the Tata Group, Tata Consultancy Services is controlled and operated by Tata Sons. Their website says approx. The holding company's shares are 66% owned by charities controlled by the Tata family. The company was founded in 1868 by Jamsetji Tata.
Company - Nike
Durable
Country: USA
Market capitalization – $88.2 billion
Phil Knight has been the face of the famous Nike brand since 1964, when he founded the company. In June of this year, Knight announced that in 2016 he would hand over the post of chairman of the board to his son Travis.
9. Kinders
Company - Kinder Morgan
Industry – energy
Country: USA
Market capitalization – $90 billion
After leaving Enron, Richard Kinder founded Kinder Morgan with partners in 1997. Kinder Morgan is the fourth US energy company. Kinder and his wife Nancy are Houston's leading philanthropists. They lead charitable foundation Kinder Foundation.
8. Pihi-Porsche
Company – Volkswagen
Industry - consumer durables
Country: Germany
Market capitalization – $120 billion
Many members of the Piechow-Porsche clan own a major stake in Volkswagen through the holding company Porsche Automobile Holding. Their ancestor Ferdinand Porsche founded the Porsche company and was a member of the Nazi party. Volkswagen assembled the first car for Adolf Hitler. Currently, at least five family representatives sit on the board of Volkswagen. Volkswagen owns such famous brands as Porsche, Audi and Bentley.
7. Lee Family
Company - Samsung Electronics
Industry – information technology
Country – South Korea
Market capitalization – $174 billion
Lee Kun-Hee helped his father turn his father's company, Samsung Group, into a multinational giant. He heads the board of the group's main company, Samsung Electronics, and his son and intended successor Jay Lee is vice chairman. Daughters: Boo Jin and So Hyun also hold high positions in the company. In 2014, the court refused to consider a lawsuit by Lee Kun-Hee's children, who claimed that he stole shares from them.
6. Ellisons
Company - Oracle
Industry – information technology
Country: USA
Market capitalization – $192 billion
Larry Ellison still serves as chairman and chief technology officer of Oracle, which made him the third-richest person in America. Ellison stepped down as chief executive of the company last September. Despite the fact that his children Megan and David own significant stakes in the company, it is unlikely that they will succeed him. The Ellisons Jr. are film producers.
5. Lehmanns, Sikupirs and Telles
Company - Anheuser-Busch InBev
Industry - consumer goods
Country – Belgium
Market capitalization – $197 billion
3G Capital was behind the 2008 merger that created Anheuser-Busch InBev. Now 3G's general manager, Jorge Paulo Lehmann, is the richest man in Brazil. He is the main shareholder of the brewing company.
His partners, Carlos Sicupira and Marcel German Telles, also own large blocks of shares in the company. Together they own approximately 26% of Anheuser-Busch InBev. Lehmann and Telles are on the board of directors.
4. Zuckerbergs
Company – Facebook
Industry – information technology
Country: USA
Market capitalization – $225 billion
Mark Zuckerberg brought relatives into the Facebook empire. His older sister, Randi, worked in marketing before starting her own company. In gratitude for the money his father lent at the early stage of the company's development, Mark gave him 2 million shares.
3. The Waltons
Company – Walmart
Industry - consumer goods
Country: USA
Market capitalization – $241 billion
The Walton family, according to Thomson Reuters, owns half of the empire through its holding company Walton Enterprises. 50% of the shares is enough for five relatives to be among the richest people on the planet. Brothers Rob and Jim serve on the company's board of directors, along with sister Alice and sister-in-law Christy. The fortune of all four is estimated at around $35 billion. Cousins Anne Walton Krenke and Nancy Walton are also billionaires thanks to large stakes in the company. Rob Walton was replaced as Walmart chairman in June by his son-in-law, Gregory Penner.
2. Hoffman-Oeri
Company – Roche
Industry – healthcare, drug production
Country: Switzerland
Market capitalization – $254 billion
Fritz Hoffman and his wife founded a cough syrup company that today produces the best cancer drugs. His heirs still own at least half of the company's shares, according to Bloomberg. There are at least 8 billionaires in the Hoffman-Oeri family, including Andreas Oeri and Andre Hoffmann, who sit on the company's board of directors.
1. Sandoz
Company - Novartis
Industry – healthcare, drug production
Country: Switzerland
Market capitalization – $279 billion
Novartis is among largest producers medicines. The company was formed in 1996 as a result of the merger of Sandoz and Ciba-Geigy. Now the descendants of Eduard Sandoz, who founded the company in 1886, own a large stake in Novartis. The Sandoz Family Foundation is the company's largest shareholder, and its president, Pierre Landolt, sits on the Novartis board of directors.
Why family businesses are attractive
Family companies are ahead of their non-family competitors in terms of profitability, return on investment, revenue dynamics and EBITDA, according to The CS Family 1000 report. Credit Suisse experts explain this by the peculiarities in their approach to financial management. Representatives of “dynastic” businesses pay more attention to the stability of the balance sheet and try not to resort to unnecessary borrowing from external sources, financing the business with their own funds, as a result the ratio of net debt to EBITDA (earnings before interest, taxes, depreciation and amortization) is such companies are 20% below average. As a result, they are less susceptible to fluctuations in interest rates than non-family companies and can more easily weather periods of market instability.
Photo: Michele Limina/Bloomberg
In such companies, the board of directors makes decisions more quickly, especially if among the board members there is a representative of the family of the founder or owner. “Thanks to this, agreement between all shareholders occurs more quickly. And the faster, the more effective it is,” says Bogdan Zvarich, senior analyst at Freedom Finance Investment Company. If there is a large dispersion of shares among minority shareholders, the process of agreement on important issues may be delayed, and due to uncertainty, the value of the company’s securities may decrease, the expert explains. However, this type of management may also have disadvantages - it may lack objectivity when making decisions, warns investment analyst at Veles Capital Investment Company Alexey Adonin. In his opinion, the more independent directors on the board, the better it will be for the management of the company.
The human factor remains important. “A family company is effective when the owner gives great importance family traditions or continues them when it comes to the second and subsequent generations,” says Ernst & Young partner and head of the private client services group in the CIS Anton Ionov, who researches family businesses in Russia. The owner of a family company treats business not as a means of momentarily receiving money, but as a mission and work of his life and future generations, the expert notes.
What about in Russia?
Domestic portfolio managers believe that the conclusions of Swiss analysts on the global market should not be rushed to apply to Russian practice. “Family companies have been formed in the West for centuries, and our companies have not been on the market for so long so that we can work out and evaluate the impact of continuity and family traditions on financial results business. Yes, and myself market economy a little over 20 years,” says Bogdan Zvarich.
According to Credit Suisse, the average age of family companies in developed countries in Europe is 80 years, in the United States - 61 years, in Latin America - 44 years, in Asia - 37 years, and in Eastern Europe, the Middle East and Africa - 30 years.
Nevertheless, there are family companies in Russia. Analysts from Ernst & Young, together with the Center for Family Business at the University of St. Gallen (Switzerland), identified 12 enterprises in Russia in which a controlling stake or a decisive vote on the board of directors belongs to one couple, and shares of nine of them can be purchased on the stock exchange. These 12 Russian companies The study included 500 companies from around the world where family ownership or voting power on the board of directors was more than 32% for public companies and 50% for non-public companies. Of the public family companies, the E&Y rating included Rusal, Sistema, Magnit, Dixie Group, Severstal, Pipe Metallurgical Company (TMK), Novolipetsk Iron and Steel Works (NLMK), Magnitogorsk Iron and Steel Works (MMK), Mechel, non-public ones - T Plus, Stroygazmontazh, SUEK.
According to the authors of the rating, the share of shares owned by one family in these companies is 40-100%. All this belongs to the families of famous billionaires - Deripaska, Yevtushenkov, Galitsky, Lisin, Melnichenko, Mordashov, Rotenberg, Vekselberg, Zyuzin, Pumpyansky, Kesaev and Katsiev.
The majority of Russian family companies in the sample are represented by the metallurgical sector. From October 2007 to October 2017, the Moscow Exchange metals and mining sectoral index grew by 68%, and it is with it that it is rational to compare the dynamics of individual securities metallurgical companies. Over ten years, the market value of shares of NLMK and MMK increased by 37%, Severstal - by 53%. TMK shares fell by 77% during this time. The shares of Mechel and Rusal entered the market later than ten years ago, but their dynamics turned out to be several times worse than the dynamics of the industry index.
Dixy and Magnit represent the consumer sector. The corresponding sectoral index of the Moscow Exchange has risen 2.2 times over ten years. Over the same period, Dixy shares lost about 7% of their value. Magnit shares increased 8.58 times during the same time.
Photo: Oleg Kharseev / Kommersant
Shares of AFK Sistema (controls assets from various sectors of the economy) have fallen by 65% over ten years. The MICEX index grew by about 20% during this time.
Thus, of the nine securities under consideration, the market as a whole (according to the MICEX index) was able to outperform the securities of only four companies, and only the shares of Magnit were able to beat their sector (according to the industry indices of the Moscow Exchange).
To take or not to take
Russian experts believe that it is worth taking a closer look at the securities of such enterprises, but under no circumstances make a decision to invest in them just because world statistics show an attractive return for investors. In their opinion, it is worth paying attention to the personality of the owner himself, his plans for transferring the business to relatives, as well as the latter’s willingness to accept and competently manage it. “At the helm of all companies that could be classified in this category are still the founders, that is, the first generation. Therefore, there is no need to talk about continuity and its consequences yet,” says Bogdan Zvarich.
But the current managers have no intention of passing the business on to the next generations. According to a survey of about 3 thousand owners and managers of family companies in the world, conducted in 2016 by PwC, in Russia only 9% of surveyed businessmen plan to transfer the business to their children versus 39% in the world, but in our country 39 versus 17% plan to sell it. in the world.
“We have not developed a tradition of transferring business to inheritance. Money here and now is more valuable than the fortune that children will have thanks to business,” says Anton Ionov. “A more common scheme is that a businessman sells his shares to a partner, and then gives the proceeds from them to his heirs,” says Viktor Markov, senior analyst at Zerich Capital Management. Therefore, global trends cannot be applied to Russian market, who doesn’t have that much experience behind him.
When creating a business, of course, it is interesting to know: how long will it last? The latest data from Yale School of Management professor Richard Foster is not encouraging: the average lifespan of the largest publicly traded companies in the S&P 500 index has fallen from 67 years in the 1920s to 15 years today. According to analysts, the average lifespan of companies is from ten to fifteen years, regardless of the sector of the economy: you sell apples or spaceships. However, even now there are islands of stability and longevity in the world - for example, Japan. Today there are more than 50 thousand companies over 100 years old.
The question inevitably arises: why this trend? It would seem that we now live in more favorable times than fifty or a hundred years ago. Ari De Geus in his book explains this by saying that in modern world managers focus on economic activity, production of goods and services, forgetting that the main value of any company is its employees. Below we present a ranking of the oldest companies in the world. Most of them are family businesses in Japan.
1. Nisiyama Onsen Keiunkan, from 705
The oldest hotel in the world, listed in the Guinness Book of Records. It is noteworthy that the hotel is still operating and is owned by the same family - the descendants of the founder Fujiwara Mahito. In the Middle Ages, thermal springs were the most common vacation spot among samurai. Famous guests of the hotel included Japan's first shogun, Tokugawa Ieyasu, and the 46th Emperor Kouken.
2. Koman, since 717 
The second oldest company in the world is also a hotel in Japan. The head of the Hyuga family decided to build a temple in the city of Toyooka after he had a dream with divine messengers. During construction, he discovered a hot spring, so Hyuga also built a hotel.
3. Hōshi Ryokan, since 718 
Also a hotel in Japan in the city of Komatsu. The current owner bears the name of his founding ancestor Zengro Hoshi. It is surprising that if daughters were born into the Hoshi family, the family would adopt a son-in-law or an adult man from outside to continue the business and tradition.
4. Tech Kaihatsu, since 760 
Tech Kaihatsu, a company that manufactures machinery today, used to be a blacksmith. "Kaihatsu" means "development" in Japanese. What can I say, you can only learn development from this company.
5. Genda Shigyo, from 771
The company has been doing the same thing for many centuries - producing paper bags and "mizuhiki", colorful ribbons for decorations and invitations for weddings, funerals and other important events.
6. Stiftskeller St. Peter, since 803
The oldest company in Europe is the Stiftskeller St. restaurant. Peter (“Cellar of St. Peter’s Monastery”) in Salzburg. The place, which at one time was an ordinary monastery refectory, is now reputed to be the most expensive restaurant in Salzburg. The restaurant does its best to preserve the medieval atmosphere.
7. Staffelter Hof, since 862
In the city archives of the city of Crova there are original documents confirming the fact that the distillery existed already in 862 - then King Lothair II of Lorraine donated this land to the local abbey. Subsequently, the land was taken away from the church, but wine production was not stopped. Staffelter Hof produces exclusively exclusive, expensive wines - approximately only 500 bottles per year.
8. Tanaka-Iga, since 885
Again, a Japanese company from the city of Kyoto, which produces religious objects: bells, amulets, lamps and other things necessary for the work of a Buddhist temple.
9. Sean's Bar, since 900 
The oldest drinking establishment in the world. The secret of longevity lies in the ideal location - the bar was built in the heart of the country, in the city of Athlone, on the banks of the picturesque River Shannon. The most famous regulars are the musicians of the group U2. On the wall of the pub hangs a certificate from the Guinness Book of Records, confirming the status of the oldest tavern.
10. The Bingley Arms, since 953
The pub has been open since Viking times. The place is attractive not only for its history, but also for its location: the establishment is located close to the attractions of Leeds and York.
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Today there are many companies that focus on long service life, established traditions and consumer trust in their goods and services. At the same time, few people know that there are companies in the world that have been operating for several hundred years since their founding. We have compiled a list of ten of the oldest brands on Earth.
In tenth place among the oldest companies is The Shore Porters Society, which is located in Aberdeen, Scotland. The company's employees provide services related to freight transportation, moving, and storing things. The history of this company dates back to 1498. This is the oldest today transport company worldwide. In addition, she works in a wide variety of industries, providing assistance to people in the matter of moving house buildings, as well as transporting valuable property located in the area of responsibility of auction houses.
Another company, Kremnica Mint, has been minting coins for approximately 800 years. Production started in Slovakia back in 1328. After the city received permission from King Charles Robert of Anjou to issue florins, as well as ducats, which could later be used in Europe, the city organized a new mint.
Banknotes issued in Slovakia had a high reputation. Many noted their durability and high quality. The Mint continued to function even after some of the equipment installed on it was destroyed during the fighting during World War II.
In eighth place is the Frapin company, which has been distilling since 1270. Many companies prefer to purchase grapes from other people's plantations, including those located abroad. However, Frapin has been using exclusively home-grown products for many hundreds of years. Today, the main product of the company is vintage cognac, the manufacturing process of which is strictly controlled at all production line. For today alcoholic products Frapin is recognized as one of the best and highest quality in the world.
The Affligem Abbey Brewery company is in 7th place in our ranking and has been operating for almost 1000 years. It was founded back in 1074 in Belgium. A company with a ten-century history produces beer. The product, which has been improved over the centuries, is based on a recipe created by the monks of the local abbey. Ten years ago, one of the oldest enterprises in the world was bought by Heineken. It is worth noting that the plant is still located in the same place, and also produces beer, which is supplied to almost all countries of the world.
The Polish company Wieliczka Salt Mine began operating in Krakow 30 years earlier than the previous company - in 1044. It is engaged in the extraction of salt, as well as the subsequent transportation of this product to all countries of the world. The key reason for the success of the enterprise remains large salt deposits, which are under strict control by experts. Manufacturing process is not highly complex, and the product remains in demand at all times. At one time, the company was able to attract the attention of the Pope, as well as US President Bill Clinton.
The next place on the list goes to another brewing company - Weihenstephan Brewery. It was opened in 1040 and throughout the history of its work there have been no recorded periods of long interruptions in operation. Even today you can order a drink brewed at this enterprise, which is organized on the territory of Freising, Germany. According to experts, this beer can be called an elite drink not only because of its High Quality, but also the long history of the creation of the product and the work of the company, which marked all the main milestones in the development of brewing.
In the city of Athlone in Ireland there is Sean's Bar, which today is recognized as one of the oldest pubs in the world. This establishment was created in 900. For more than a thousand years, the establishment served visitors, providing them with beer and other alcoholic drinks. Thanks to the fairly good location of the drinking establishment, there is an almost continuous flow of customers. The pub building is located at the crossroads of the River Shannon, which was previously one of the few safe routes across the moorland.
Restaurant Stiftskeller St. Peter, located in the Austrian Salzburg, opens the three oldest companies in the world. It was here that a number of representatives of the royal family were received, as well as prominent figures who were noted not only in the formation of Austria, but also in modern history. Today this restaurant is known as one of the best in Europe. The work of this institution began 1219 years ago - in 803.
The leaders of the list of the oldest companies in the world are enterprises located in the land of the rising sun. Nishiyama Onsen Keiunkan is located in Yamanashi, Japan and has been in business since 705. It is he who is officially recognized as the oldest hotel that continues to operate to this day. Surprisingly, the descendants of the creators continue to manage it. During this time, 52 generations of the family changed.
