Family
Business Magazine E-Newsletter
June
17, 2008
Contents
1.
Peachtree accounting software, support offered free to small U.S.
family firms.
2.
InBev makes its bid for Anheuser-Busch.
3.
Wal-Mart chairman's son-in-law is elected to board.
4.
Smucker to acquire Folgers brand from P&G.
5.
Hallmark announces consolidation, layoffs.
6.
Bertelsmann names publishing outsider to head Random House.
7.
How to build a unified family shareholder team.
8.
Cohesion in a 400-member family.
1. Peachtree accounting software,
support offered free to small U.S. family firms. In an
effort to support family businesses in the current economic crunch,
Sage Software Inc., the maker of the Peachtree line of accounting
software programs, is offering a free single-user copy of Peachtree by
Sage Complete Accounting 2009, plus six months of free support, to
1,500 qualifying small family businesses. The giveaway, which Sage
calls the "Peachtree Family Owned and Operated Initiative," was
launched on June 4 and will last through Sept. 30, 2008, or until 1,500
qualifying applications are received, whichever comes first. Sage
estimates the total value of the donated software at $400,000. To
qualify, a company must be U.S.-based, must currently use a manual
system or Excel to handle its accounting and must employ the owner plus
at least one other family member. Cheryl Hanley, Sage's senior
marketing manager, says she conceived the promotion after watching a TV
news segment on a family firm that was forced to lay off the owner's
son. "It just hit me that there's got to be something we can do to help
family-owned businesses," Hanley says. Connie Certusi, general manager
of the Peachtree product line, adds, "Our heritage and our brand is
[based] around providing small businesses with what they need to
succeed." The company hopes its software's cash-flow management
solutions will help small family businesses make better financial
decisions, she says. The altruistic initiative has benefits for Sage as
well, Hanley notes: "If we can get these small businesses off on the
right foot and get them into the Peachtree family, that's a very, very
positive thing for us." For details on the promotion and eligibility
requirements, see www.peachtreecares.com.
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2. InBev makes its bid for
Anheuser-Busch. As had been expected, Belgian-Brazilian
beer company InBev NV launched an unsolicited bid to acquire the
132-year-old, St. Louis-based Anheuser-Busch Cos. for $46.4 billion,
the Wall Street Journal reported. Anheuser
CEO August A. Busch IV has signaled his opposition to a takeover of the
company, which was started by his great-great-grandfather. "In April,
he told beer distributors at a meeting in Chicago that a takeover
wouldn't happen 'on my watch,'" the Journal
article said. The report noted that "InBev appeared ready to make a
number of concessions to win Anheuser's approval.... [I]t was prepared
to adopt the Anheuser-Busch name for the combined company and establish
its North American headquarters in St. Louis. The company itself said
it wouldn't close any U.S. breweries and that it would invite a number
of Anheuser directors to join the board of the combined company as well
as seek to retain key members of its management team." The Journal reported that the Busch
family owns less than 4% of the stock and thus couldn't block the deal;
moreover, some family members are actually open to discussions with
InBev. "Once the world's largest beer maker, the company passed up many
opportunities to expand globally under August Busch III," father of the
current CEO, who opposes a takeover, the report said. "InBev and
SABMiller, both aggressive at expanding through acquisitions, were able
to become larger." In a later article, the Journal reported that Anheuser
"has begun talks with Mexico's Grupo Modelo SA about a possible
combination of the two brewers" that could help Anheuser thwart the
bid. Anheuser already owns about 50% of Modelo. "Without help from
Modelo, Anheuser appears to have limited options for evading the InBev
bid," the article said. It added that there are "significant hurdles"
to a new deal with Modelo. "Analysts say Anheuser shareholders are
unlikely to be persuaded that buying Grupo Modelo is a better option
than succumbing to InBev's entreaties." Moreover, the article said,
Modelo "would have to cede its cherished independence," and the two
companies "also would have to put aside what people close to both of
them describe as years of hostility and resentments that have built up
during their partnership, which dates to the early 1990s." Modelo, also
a family-run business, is "controlled by a voting trust, which in turn
is controlled by 90-year-old Antonino Fernandez," the report noted. "If
Mr. Fernandez doesn't want to sell, Modelo isn't for sale, analysts
say." An earlier Journal report
said that a Florida
couple with no connections to Anheuser, Wren and Daniel Fowler, have
launched a website, SaveBudweiser.com, "to galvanize support for
Anheuser-Busch to stay in America." (Sources: Wall Street Journal, June 3, June
12 and June 13, 2008).
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3. Wal-Mart chairman's son-in-law is
elected to board. Gregory B. Penner, son-in-law of
Wal-Mart chairman and son of the founder S. Robson (Rob) Walton, was
elected to the company's board at its annual meeting June 6, "in what
some Wal-Mart watchers see as the start of a leadership change" at the
giant company, the Wall Street
Journal reported. Rob Walton, 63, "seems to be grooming Mr.
Penner, a longtime protégé, for a leadership role at
Wal-Mart," the Journal
article said. The report noted that Penner helped launch the company's
online unit; was CFO of Wal-Mart's money-losing Japanese unit, Seiyu
Ltd.; and has managed Walton family investments. Penner, who is married
to Walton's daughter Carrie, reportedly "wholeheartedly embraces the
family's long-horizon view of business," though some were surprised at
his nomination to the board because he isn't a blood relative, the Journal reported. (Source: Wall Street Journal, June 5, 2008.)
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4. Smucker to acquire Folgers brand
from P&G. J.M. Smucker Co., the jelly and jam company
led by fourth-generation co-CEOs Richard and Tim Smucker, is acquiring
the Folgers coffee business from Procter & Gamble Co. Fortune magazine's senior
editor-at-large Allan Sloan explained on the Washington Post's website that the
$3.3 billion transaction is a tax-advantaged "reverse Morris Trust"
deal, which Smucker also used to buy Jif peanut butter from P&G.
"Technically, Smucker isn't buying Folgers from P&G...," Sloan
wrote. "Instead, Smucker will acquire a new, independent company that
P&G will create to own Folgers. This company will be owned by some
or all of P&G's existing shareholders. That separation is a
tax-free transaction. Then, a nanosecond after the Folgers company is
created, Smucker will buy it for about 63 million newly issued Smucker
shares. That stock-for-stock deal will be tax-free, too. When the dust
settles, Smucker will own Folgers, and Folgers shareholders will own
about 53 percent of Smucker. If they own less than a majority of
Smucker, the deal won't be tax-free." The arrangement won't dilute the
Smucker family's control of the public company, Sloan explained,
"thanks to unusual provisions in Smucker's corporate charter that give
long-term holders (like the Smucker family) 10 votes a share on key
issues, such as deciding whether to sell the company, while short-term
holders have only one vote. The newly issued Smucker shares will be
10-voters to start, but will become 1-voters when they change hands.
This deal also includes a $5-a-share cash dividend for existing Smucker
holders just before the deal closes." (Source:
washingtonpost.com, June 10, 2008.)
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5. Hallmark announces consolidation,
layoffs. Hallmark Cards Inc., the Kansas City
greeting-card company owned by the Hall family, will close
manufacturing operations at Hallmark Canada in Toronto; DaySpring Cards
in Siloam Springs, Ark.; and Sunrise Greetings in Bloomington, Ind.,
the Kansas City Business Journal
reported. The company will consolidate the work into its plants in
Lawrence and Topeka, Kan. The move will result in layoffs of 335
employees, the article said. "The three divisions will remain in their
respective headquarters and continue all other functions," the report
said. Hallmark bought DaySpring Cards in 1999 and Sunrise Greetings in
1998, according to the article. A company spokeswoman told the Kansas City Business Journal that
"Hallmark had never integrated the companies' manufacturing operations
with its existing operations ... and is doing so now to improve
efficiency." (Source: Kansas
City Business Journal,
June 4, 2008.)
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6. Bertelsmann names publishing
outsider to head Random House. German conglomerate
Bertelsmann AG has appointed a German industrial engineer, Markus
Dohle, to head its Random House book publishing unit. The move,
according to a Wall Street Journal
report, "underlies a cultural shift at Europe's largest media company,
as it moves back to its earlier roots." Bertelsmann's former CEO,
Thomas Middelhoff, "leapt onto the world stage with splashy investments
in television, books and digital media" before being ousted by the
company's controlling Mohn family in 2002, the article said. "Since
then, the company has taken a more conservative approach. Instead of
big media acquisitions, the enterprise that started in 1835 as a
printer is focusing again on less-glitzy, behind-the-scenes businesses
such as data storage, customer mailings and call centers." The article
also noted that "it appears increasingly difficult for a non-German to
become a management-board member at Bertelsmann without spending a long
time in Gutersloh [the German town where Bertelsmann and the Mohns are
based] first. The Mohn family increased its grip on the company after
buying out the 25% stake held by Groupe Bruxelles Lambert, a Belgian
minority stakeholder, in 2006." (Source: Wall Street Journal, May 21, 2008.)
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7. How to build a unified family
shareholder team. In order to serve effectively as an
ownership group, family members must learn to put family roles aside
and think of themselves as business partners. In other words, decision
making and conflict resolution should not be driven by emotions or
family status; what's best for the business should be the paramount
concern. A systematic approach toward consensus building is helpful,
especially in later-generation companies with many family shareholders.
Families who are scrupulous about documenting decisions and planning
for emergencies will have fewer sources of discord.
For a
comprehensive guide to helping active and inactive family company
owners to understand and work effectively with each other, see The Family Business Shareholder's Handbook.
Learn more about the newly published book and see the table of contents
here.
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8. Cohesion in a 400-member
family. Laird Norton Company LLC, one of America's 100
oldest family companies, is run by a family with almost 400 living
members -- one of the largest family ownership groups in the world. The
challenge facing the company, headquartered in Seattle, is to keep
those family members engaged while making sure the business has a
single vision, not hundreds of individual ones. In the past several
years, Laird Norton has changed significantly. Founded in 1855 by two
brothers and a cousin, the company started out logging white pine,
milling it and sending logs down the Mississippi River. Today it has
cut its 150-year-old ties to the lumber industry and now encompasses
three types of business: financial services, real estate and
next-generation investments. In 2000, the family split the CEO's duties
into two jobs: a CEO, to lead the business, and a family president, to
run programs for family members.
For more
details on the measures that Laird Norton's ownership group took to
keep its family ties strong -- and to learn more about America's oldest
family companies -- see the Summer 2008 issue of Family Business Magazine. Visit our website
for subscription information.
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Learn the secrets for keeping your
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