Families drive M&A surge – here’s ten of them

Merger & acquisition activity has picked up massively in 2015 mostly driven by US corporations taking advantage of a strong dollar to buy internationally. According to Deloitte’s M&A Index, $1.8 trillion of M&A deals were done in the first half of 2015, up 22% from the same period a year ago. A considerable number of these deals are being driven by families – here’s ten of the most prominent ones in no particular order.

Hero MotoCorp

The Indian motorcycle business owned by the Munjal brothers bought the Delhi-based Firefox Bikes for an undisclosed sum in September. Hero is the world’s biggest maker of bicycles by volume and the deal is designed to take advantage of the growing demand among the country’s affluent to use bikes for leisure. The Munjal family is among India’s wealthiest family.

Dell

The world’s third biggest maker of computers bought the digital storage company EMC for $67 billion in October – one of the largest deals ever done in the tech sector. The Texas-based computer giant is very much synonymous with its owner Michael Dell. Dell’s family office – MSD Capital – is one of the most active global investors and is rumoured to have made a staggering $16 billion in deals in the last few years.

Reliance Capital

Anil Ambani’s financial arm, Reliance Capital, bought Goldman Sachs’ fund management unit in India for a deal worth $37.5 million. Ambani together with his brother Mukesh are among India’s biggest deal makers and have amassed huge fortunes, although they started from a privileged position given their father Dhirajlal Ambani started the Reliance empire in the 1960s.

Ball Corporation

The US packaging company earlier this year bought the UK can maker Rexam for $8.4 billion. OK, the family behind the Ball Corporation, famous for its glass jars, may have long since left the management of the business to outside professionals, but they still own 60% of the company’s shares. So it’s probably fair to say that a deal of this size would have involved them.

Berkshire Hathaway

Never a year goes by without the legendary investor Warren Buffett and his investment group Berkshire Hathaway doing a headline grabbing deal and true to form the big for deal for Berkshire so far in 2015 has been the acquisition of Precision Castparts Corp., a maker of equipment for the aerospace and energy industries. Berkshire paid $37.2 billion for the Portland, Oregon-based company. That will put a big dent in the $66 billion cash pile Berkshire has been sitting on for some time.

Oprah Winfrey

The media mogul and TV personality Oprah Winfrey bought a 10% slice of the slimming group Weight Watchers for $43 million in October. It’s not certain that the deal was instigated by her family office OW Management, which managers some of Winfrey’s $3.1 billion fortune, but it probably had a hand in it.

Axel Springer

The German publishing empire controlled by the Springer family bought the web-based media group Business Insider for $343 million in September. Although the family aren’t directly involved in the management of the business, Friede Springer, the widow of Axel Springer who founded the business in 1946, sits on the supervisory board and owns more than 50% of the shares in the publishing business.

Samsung

The huge South Korean conglomerate owned by the Lee family and best known for its mobile phones did a deal worth $9.3 billion to purchase a construction subsidiary called Samsung C&T. That may seem weird – didn’t Samsung already own Samsung C&T? Well, apparently not and the move, say analysts in the know about these things, was designed to consolidate the Lee family’s control over the Samsung Group, and particularly Samsung Electronics, considered the most valuable part of the sprawling empire.

Exor

The investment group controlled by members of the Agnelli family, the biggest shareholders in Fiat Chrysler, acquired a big chunk of shares (43.4%) in The Economist Group for a deal worth around £287 million in early October. The Agnelli family appear to be on a roll –  a few weeks later, Exor benefitted enormously from the listing of Ferrari, the iconic carmaker, on the New York Stock Exchange. Exor owns around 45% of the voting rights in Ferrari.

Wates

Earlier this year, the UK construction group owned by the Wates family bought Shepherd Group, another construction company, for an undisclosed sum. The move is designed to help Wates reach its target to be a £2 billion business in the next few years. Wates, which was founded 118 years ago, is chaired by James Wates, the fourth generation of the founding family.