Family business in Latin America Facts and figures

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1 Family business in Latin America Facts and figures Of the world s 500 largest family businesses, 7.4% (37) are located in Latin America. Source: Global Family Business Index, University of St. Gallen, Center for Family Business. The largest family businesses in Latin America The top 10 family businesses generated approximately US$250.8 billion of Latin America s GDP of US$5.3 trillion in 2015 and employed more than 1.2 million people. Rank Company name América Móvil SAB de CV Source: Global Family Business Index, University of St. Gallen, Center for Family Business. JBS SA Odebrecht SA Andrade Gutierrez SA AntarChile SA Revenues (2015) in US$ billion Number of employees (2015) 195, , , ,000 17,398 Family Slim Batista Odebrecht and Gradin Andrade and Angelini Gutierrez Family shareholding or 61.4% 42.4% >82.0% >50.0% 63.4% voting rights Public listed company Yes Yes No No Yes Country Mexico Brazil Brazil Brazil Chile 144 EY Family Business Yearbook 2017

2 The top 37 family businesses in Latin America Generated US$414.3b in revenues (7.9% of Latin America s GDP) Employ 2,308,427 people (0.8% of Latin America s workforce) Realize US$344.2b of market capitalization The top 3 industry sectors are: 12 Consumer products and retail 5 Professional firms and services The top 3 countries are: 14 Mexico 12 Brazil Are, on average, 77.1 years old 78.4% are public listed companies 5 Mining and metals 6 Chile Source: Global Family Business Index and Oxford Economics information; revenue and number of employee figures as of 2015; market capitalization as of 31 December Some interesting anniversaries Anniversary Company Family Industry Headquarters Country 130 Grupo Bal, SA de CV Baillères González Conglomerate Mexico City Mexico 130 Industrias Peñoles, SAB de CV Baillères Mining Mexico City Mexico 125 Grupo Casa Saba, SAB de CV Saba Pharmaceutical distributor Mexico City Mexico 75 Grupo México, SAB de CV Germán Larrea Mota-Velasco Mining Mexico City Mexico 60 Quiñenco SA Luksic Conglomerate Santiago Chile Source: Global Family Business Index, University of St. Gallen, Center for Family Business Empresas COPEC SA Itaú Unibanco Banco Multiplo SA Cencosud SA Banco Bradesco SA Cemex SAB de CV ,922 90, ,474 92,861 43,000 Angelini Moreira Salles and Paulmann Aguiar Zambrano Souza Aranha 38.5% 44.9% 62.0% 48.4% 33.0% Yes Yes Yes Yes Yes Chile Brazil Chile Brazil Mexico 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%. Revenue, number of employees and shareholding information as of EY Family Business Yearbook

3 Some recent M&A deals involving Latin American family businesses December 2016 Brazil July 2016 Chile July 2016 Brazil March 2016 Mexico March 2016 Mexico Suzano Papel e Celulose SA The Feffer family, which has a controlling share in the Brazilian pulp and paper producer Suzano Papel e Celulose SA, may consider splitting control in a sector consolidation deal. Walter Schalka, the group s CEO, indicated in 2016 that Brazil s pulp and paper industry is expected to face a consolidation wave, as excess capacity has cut prices to record lows in the last two decades. Recent speculations point to a possible merger between Suzano and Fibria Celulose SA. The latter has also been rumored to be considering a tie-up with Eldorado Brasil Celulose SA. To date, no official discussions have been revealed. Schalka noted that the combination of two or more pulp companies is just one of the ways to reshape the embattled sector. The sector s woes have had a negative impact on Suzano s financial results. In the third quarter of 2016, the company s net revenue was US$639.9 million, marking a 27% decline year on year. Ripley Corp SA El Puerto de Liverpool SAB de CV, a Mexico-based operator of department stores, has entered into an agreement to acquire Ripley Corp SA a Chile-based company engaged in the retail sales of apparel, accessories and home products from the Calderón family for US$1.2 billion, at US$0.63 per share. The offer represents a premium of about 25% to Ripley s closing price on the Santiago Stock Exchange on 5 July The transaction includes an option for El Puerto to buy additional shares five years after completion of the transaction. Lupo SA Lupo announced a deal to buy rival underwear manufacturer Scalina. According to Lupo, the completion of the deal will take place after approval by Brazil s Administrative Council for Economic Defense. The financial details of the transaction were not disclosed, but a knowledgeable source said that the value of the operation was about US$43.9 million. Scalina underwear is sold in Scala s 100-plus franchised stores in malls throughout Brazil. The company employs more than 4,500 people and has three factories. Lupo, a family-controlled company, sells men s and women s underwear, as well as sports apparel and other accessories, in more than 300 shops. Grupo Televisa de SA de CV Grupo Televisa de SA de CV is a listed Mexico-based media group involved in television, publishing and radio. It has agreed to acquire a 50% stake in Television Internacional SA de CV, the Mexico-based company that provides cable television, internet access, telephony services and bidirectional data transmission, from Multimedios Estrellas de Oro SA de CV, the Mexico-based media and entertainment company, for a consideration worth US$70.4 million. As a result of this transaction, Grupo Televisa will own a 100% stake in Television Internacional and will be able to exploit efficiencies and economies of scale among its five cable operations in Mexico, expanding the double- and triple-pay offerings of its subsidiary Izzi Telecom. Inversora Carso SA de CV Inversora Carso SA de CV and Esther Koplowitz have agreed to acquire an undisclosed stake in Fomento de Construcciones y Contratas SA (FCC), via capital increase. Inversora Carso SA de CV, the Mexicobased investment company controlled by Carlos Slim, has interests in companies engaged in construction, environmental services, and the renewable energy sector. FCC, a listed construction company headquartered in Madrid, is engaged in similar sectors. The transaction is in line with FCC s strategy of strengthening its capital and reducing its indebtedness. Source: ThomsonOne. Selected obituaries We take this opportunity to remember some of the famous family entrepreneurs who died in the last year: 3 February 2017 Mexican bakery magnate Lorenzo Servitje has died at the age of 98, after building his Grupo Bimbo into an international snack and baked goods empire that acquired brands including Entenmann s, Thomas, Freihofer s and Stroehmann. Juan Pablo Castañón, the Head of Mexico s Business Coordinating Council, called Servitje s death a great loss for Mexico. Lorenzo launched Grupo Bimbo in 1945 with other partners, starting with 38 employees and 10 delivery vehicles. The company now operates in 22 countries with 100 brands, and it recorded more than US$10.7 billion in sales in October 2016 Roberto Gerardo Chwat, President of the Argentinian publishing house Editorial Sigmar SACI, was shot and killed by robbers when returning to his home in Vicente López, Buenos Aires; a victim of the growing crime wave affecting the city s suburbs. Roberto s death comes as a great blow to many of those in the publishing world, and several took to social media to express their grief and pay tribute to the memory of a man long considered an innovator in children s publishing. Sigmar was the first Argentinian publisher to devote itself exclusively to the publication of children s books, Source: Factiva.

4 Changes in leadership Camargo Corrêa SA Heinz-Peter Elstrodt appointed Camargo Correa s Chairman October 2016 Brazilian construction firm Camargo Corrêa has announced that Heinz-Peter Elstrodt has been appointed as Chairman of the Board. He will replace Décio Amaral, who was temporarily occupying the post following the exit of Vitor Hallack. Camargo Corrêa is involved in the lava jato corruption investigation and is trying to change the way it conducts its businesses. Heinz-Peter has previously worked for McKinsey and specializes in family businesses. Source: Factiva. América Móvil SA de CV Grandsons of Mexican media mogul enter family business May 2016 Carlos Slim, the multimedia mogul owner of giant América Móvil, has appointed two of his grandsons, Daniel and Rodrigo Hajj Slim, to the board of directors of some of his smaller companies. Daniel and Rodrigo, both less than 25 years old, are the sons of Vanessa, Carlos s second-eldest daughter. Daniel was appointed to the Board of Frisco Mining, and this was approved in 2015 by the shareholders (the Slim family holds 78% of the company s shares). Rodrigo joined the Board of Soinmob Inmobiliaria Espanola, a real estate company owned by the Slim family and registered in Madrid. Some of the oldest family businesses among the top 37 in Latin America Company El Comercio Bacardi Limited Organización Soriana SAB de CV Votorantim Participações SA Empresas CMPC Founded Family Industry Miró Quesada Bacardi heirs Soberón and Bringas Media Spirits Grocery and department store retail chain Moraes Industrial conglomerate Matte Pulp and paper Headquartered Lima Hamilton Monterrey São Paulo Santiago Country Peru Bermuda Mexico Brazil Chile Source: Global Family Business Index. and is well known throughout the Americas. 3 September 2016 Energy mogul Carlos Bulgheroni has died in the US, where he was hospitalized in June following a surgical procedure. According to local media, Carlos had been battling cancer for several years. The 71 year old, along with his brother Alejandro, owned Pan American Energy LLC, Argentina s secondbiggest oil company (behind state-run YPF), and Forbes magazine estimated that Carlos and Alejandro Bulgheroni had a combined fortune of US$4.8 billion. 5 May 2016 Bacardi Limited mourned the loss of Ruben Rodriguez, retired Chairman and CEO of Bacardi Limited, who passed away aged 79 in Connecticut. Ruben served Bacardi for nearly 20 years, and was admired and respected for his management approach and his relationship with Bacardi s family shareholders. He was appointed Chairman and CEO in 2000, and served as Chairman for five years and as CEO from 2000 to 2003 and again from 2004 to Before his appointment, Ruben served as the CFO for Bacardi Limited from 1993 to 2000 and as Director of Audit and Finance from 1989 to Under his leadership, Bacardi Limited experienced strong growth in sales and earnings, strengthened its corporate governance, and oversaw the successful acquisition and integration of Grey Goose vodka and Cazadores 100% blue agave tequila into the Bacardi brand portfolio.

5 Family business in Latin America Facts and figures Family business growth accelerators in Latin America The popular myth about family businesses is that they only grow slowly, over a long period. Our family business growth accelerators confound this myth, showing that family businesses have not only sustained growth but accelerated it too. Rank in the Global Family Business Index Headquarters Company 43 Belo Horizonte, Brazil Andrade Gutierrez SA 270 Hamilton, Bermuda Bacardi Limited Source: Global Family Business Index, University of St. Gallen, Center for Family Business; Factiva; OneSource; CapitalIQ; PrivCo. 148 EY Family Business Yearbook 2017

6 Revenues (2012) in US$ billion Revenues (2015) in US$ billion CAGR* (average in %) Number of employees (2012) Number of employees (2015) Owning or controlling family Founded , ,000 Andrade and Gutierrez; >50.0% ,198 6,281 Bacardi; 100.0% 1862 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%. *Compound annual growth rate EY Family Business Yearbook