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Family businesses suffer $75 billion slide in new Fortune Global 500 ranking

Five of the world’s largest family businesses in the top 20 of the new Fortune Global 500 have seen their combined revenues slump by more than $74.5 billion compared to last year.

Five of the world’s largest family businesses in the top 20 of the new Fortune Global 500 have seen their combined revenues slump by more than $74.5 billion compared to last year.

The 2015 fiscal year impacted the bottom lines of Volkswagen, Toyota Motor, Samsung Electronics, and EXOR Group by almost 6% with not even Walmart, controlled by the Walton family, immune from sales falling for the first time, Fortune reported.

Berkshire Hathaway was the exception to the rule, with revenue up by more than 7%.

Fortune’s annual ranking of the world's largest corporations by revenue revealed the US retail giant has claimed the top spot on the Global 500 for the third consecutive year and the eleventh time since 1995.

The seven heirs of Sam Walton, who died in 1992 after receiving the Medal of Freedom, and his brother James “Bud”, who died in1995, own 50.9% of the company's stock and are America’s richest family.

Volkswagen was the next family business in the Global 500, in seventh place. The Austro-German Porsche and Piech families control the carmaker.

The group was up one spot from eighth place last year despite the 12% drop in revenue to $237 billion in the wake of the diesel emissions testing scandal.

Rival carmaker Toyota, led by the Toyoda family, also climbed one position to eighth place at $236 billion in revenue but was beset by recalls over faulty airbags and a slump in Prius sales.

Berkshire Hathaway, with Warren Buffett as chief executive, bucked the downward trend by rising from 14th to 11th place, with $211 billion in revenue, up $16.1 billion on revenue in 2015.

The US holding company added Precision Castparts to its portfolio in early 2016, for $32 billion, alongside car insurance company Geico, clothing manufacturer Fruit of the Loom, and railway company Burlington Northern.

Third-generation family controlled Samsung Electronics maintained its 13th position regardless of a 25% drop in profits, down to $16 billion. Fortune placed the blame squarely on poor sales of the South Korean firm’s flagship Galaxy S6 smartphone against $233 billion rival Apple, which shot up six places to ninth place this year.

Controlled by the Italian fifth-generation Agnelli family, EXOR Group held steady in 19th place with $152 billion in revenue. However, Fortune reported that without the $2 billion sale of its US real estate company Cushman & Wakefield in 2015, EXOR profits fell 21% last year.

US companies took the most places on this year's list at 134, with 103 taken by Chinese companies and 52 by Japan.

The US had 134 Fortune Global 500 companies this year, up six firms from a year ago. It is America’s first increase in presence on the list since 2002, when it had its highest total of 197 companies.

China's presence on the Global 500 continues to grow with 103 members in 2016, up from only 19 companies a decade ago however, Japan lost two from the previous year.

The combined revenues of the Chinese, Japanese, and US companies account for 58% of the Fortune Global 500. Great Britain is home to 26 Fortune Global 500 companies with 17 of them based in London.

Fortune editors said cumulative sales of the Global 500 declined for the first time since 2010.

“Total revenue shrank from $31.2 trillion in fiscal 2014 to $27.6 trillion in 2015, or a fall of 11.5%. Profits dropped by 11.2%, to $1.48 trillion.

“There are plenty of reasons for the reversal. A slowdown in China’s once-booming economy has affected companies worldwide. Growth in the US and Europe remains modest at best. And sustained low oil prices have erased billions in sales for giant petroleum producers like Exxon Mobil, Royal Dutch Shell, and Sinopec.

“But one macroeconomic trend looms largest of all: the explosive comeback of the US dollar and the wide-ranging impact of its renewed strength on global trade.”

2016 Fortune Global 500 Top 20 (Family businesses in bold)

1. Walmart Stores (US) $482 billion

2. State Grid (China) $329 billion

3. China National Petroleum (China) $299 billion

4. Sinopec Group (China) $294 billion

5. Royal Dutch Shell (Netherlands) $272 billion

6. Exxon Mobil (US) $246 billion

7. Volkswagen (Germany) $236 billion

8. Toyota Motor (Japan) $236 billion

9. Apple (US) $234 billion

10. BP (UK) $226 billion

11. Berkshire Hathaway (US) $211 billion

12. McKesson (US) $192 million

13. Samsung Electronics (South Korea) $177 billion

14. Glencore (Switzerland) $170 billion

15. Industrial & Commercial Bank of China (China) $167 billion

16. Daimler (Germany) £166 billion

17. UnitedHealth Group (US) $157 billion

18. CVS Health (US) $153 billion

19. EXOR Group (Italy) $152 billion

20. General Motors (US) $152 billion


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