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Family business roundup: Acquisitions for Berkshire Hathaway and Henkel; New York Times and PPR divest

Family businesses across the world have been in the process of making some mouthwatering acquisitions over the past two weeks, with Henkel and Berkshire Hathaway all making bold expansions. Meanwhile, PPR made some savvy divestments in Scandinavia.

Family businesses across the world have been in the process of making some mouthwatering acquisitions over the past two weeks, with Henkel and Berkshire Hathaway making bold expansions. Meanwhile, PPR made some savvy divestments in Scandinavia, the New York Times Company put its Boston Globe newspaper up for sale, and UK company Cosalt went into administration.

Berkshire Hathaway/World Publishing
In the US, Warren Buffett’s Berkshire Hathaway is to buy Tulsa World, the family-controlled daily newspaper for the city of Tulsa, Oklahoma, for an undisclosed price.

Tulsa World, which has been owned by the Lorton family since 1917, has a daily circulation of 95,000.

Third-generation family member Robert Lorton, the chairman of Tulsa World’s publisher, World Publishing, will step down from his position. He said: “For the Tulsa World and for the Tulsa community, we believe — and have decided — this is the best path to the future.”

Berkshire Hathaway owns 28 daily and 42 weekly newspapers across the US. Newspapers remain only a small part of the diversified Omaha-based company, which also holds major stakes in businesses such as Coca-Cola, Well Fargo, and, most recently, Heinz.

Tulsa World said it expected the sale to close in March.

New York Times Company
Meanwhile, another regional US newspaper is in the offing for a sale. The New York Times Company, the group controlled by the Ochs Sulzberger dynasty, is attempting to sell the Boston Globe for the second time.

In a statement released on 20 February, president and chief executive Mark Thompson, previously the director general of the BBC, said: “Our plan to sell … demonstrates our commitment to concentrate our strategic focus and investment on the New York Times brand and its journalism.”

The company first attempted to sell the paper in 2009, but backed down on the sale after Globe employees accepted wage cuts, health benefits reductions and a freeze in pensions. In its latest statement, the New York Times also said there was no assurance that any new transaction would take place.

The New York Times acquired the Globe in 1993 for $1.1 billion (€840 billion). The company is expected to make a sharp loss should the paper sell.

PPR
On the other side of the Atlantic, French luxury goods group PPR has announced a much more appetising divestment. Mail order business Redcats, an entity of the PPR conglomerate, has entered an agreement with Nordic Capital Fund for the sale of two of its Scandinavian brands: Ellos and Jotex.

In a statement released on 25 February, PPR, which is controlled by the Pinault family, said the sale was subject to the approval of the relevant competition authorities, but hoped it should be cleared in “the coming months”.

The €275 million deal is the latest divestment in PPR's piecemeal sale of the brands belonging to the Redcats catalogue. The group said: “The sale of Ellos and Jotex will mark a further step forward in the transformation of PPR into a global leader in apparel and accessories within the luxury and sport and lifestyle sectors.”

Earlier this February, PPR announced its annual revenues had risen 20.8% to €9.7 billion for 2012.

Henkel
In Germany, consumer goods company Henkel, run by the eponymous family, has acquired the Polish Laundry and Home Care brands from PZ Cussons.

Henkel signed the deal with the UK-based consumer products company on 20 February. The businesses being bought, which had combined sales of about €60 million last year, operate primarily in Poland, but also in Russia and elsewhere in eastern Europe.

The deal remains subject to merger control clearance and is expected to close in 2013’s third quarter.

Cosalt
In the UK, oil services group Cosalt, the business controlled by the Ross family and previously Grimsby's only listed company, has gone into administration.

Cosalt, chaired by co-founder of Carphone Warehouse and family member David Ross, owes £17 million (€19.72 million) to its lenders, who include the Royal Bank of Scotland and Ross himself.

The company, which was founded by Thomas Ross in 1873 and has stayed family-run since, left the stock market on 19 February. It said David James Kelly and Andrew Ross, both of PwC, had been appointed as joint administrators.

Cosalt announced the decision to appoint administration on 19 February. It added: “No employees, customers or suppliers are expected to be materially affected and all of the group's trading subsidiaries should continue to trade as usual.”

Cosalt, which is 43% family owned, made its initial public offering on the London exchange in 1971. Commenting on the situation, Ross said: “It is very sad, very sad indeed.”

Thai Beverage/Fraser & Neave
Elsewhere, Chareon Sirivadhanabhakdi, the multi-billionaire and owner of Thai Beverage, has added Fraser & Neave to his drinks and real estate empire.

On 18 February TCC Assets, Chareon’s special-purpose vehicle for the takeover, announced it had closed its mandatory cash offer for F&N, and subsequently owned 90.32% of the company.

F&N is primarily known for dominating the soft drinks market in Singapore and Malaysia, but the conglomerate also houses dairy and publishing businesses, as well as a valuable real estate portfolio.

It is not yet known whether Chareon will delist the company from the Singapore exchange.

In what is thought to be the biggest takeover in Singapore’s history, TCC Assets valued F&N at S$13.75 billion (€8.49 billion). 

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