Family Business news round-up: Rocket, Zara, Buffett, Khalifa, Tang


Rocket takes off

IPO fever continues, and family firms are getting in on the action. Rocket Internet, a German start-up incubator which is run by brothers Marc, Oliver and Alexander Samwer, was valued at €6.7bn, although the shares quickly fell. Rocket is controversial, as it “clones” successful internet firms such as retailers, sometimes launching its sites in emerging markets. A few have been phenomenally profitable, while many others have flopped. The brothers are now billionaires. 

Zara heads online

Inditex, the Spanish company which owns Zara, is making a big play on China via online marketplace Alibaba. The company, controlled by the Ortega family, already has over 400 stores in China but has not broken into the online market there. It has now done a deal with Tmall, owned by Alibaba, to sell Zara products, which is expected to dramatically boost sales. Some have wondered where further growth for the Spanish firm will come from in future. This may answer the question.  

Buffett’s branding bet

American car dealership the Van Tuyl Group is to be bought by Warren Buffett’s Berkshire Hathaway investment company, in a deal that will make the descendents of the founder, Cecil Van Tuyl, who died in 2012, billionaires. It’s expected that, in keeping with Buffett’s philosophy, not much will change in the businesses. Except that the founder’s name will vanish, and the group will be renamed Berkshire Hathaway Automotive. So much for family branding.

Private equity woos Gulf families

Private equity firms KKR and CVC are to make a joint bid for Kuwait’s Americana, which operates fast food franchises and is owed by the Khalifa family, in a deal said to be worth $4bn. In Europe and America, private equity sometimes has a bad reputation among family businesses. In the Middle East, however, the words don’t necessarily suggest Gordon Gekko and leveraged buyouts, but professionalisation and expansion. As markets boom there, expect to see more families call in the PE houses.

Hong Kong’s family problem

Does the corrosive influence of embedded family power lie behind the recent protests in Hong Kong? The protestors had many complaints, but one was that the city is dominated by a small number of family dynasties headed by unaccountable tycoons. One man who will be feeling relieved is Henry Tang, the scion of a textiles family who was considered favourite to become Hong Kong’s chief executive before losing out to CY Leung in 2012 after it was discovered he had built a illegal cellar containing a jacuzzi and home cinema at his home. After the past couple of weeks, he might feel he had a lucky escape.