Tuesday, August 22, 2023

Sweden's Wallenberg Business Empire: Power and Voting Rights

note: the market cap figures are not the Wallenberg clan's net worth.

From LaGrange Media on Wordpress, July 26:

The Wallenberg Business Empire, Europe’s Largest – A Closer Examination Anno 2023

In this article I will examine the Wallenberg family’s corporate empire, Europe’s largest business empire that spans multiple industries from telecommunication, electrification, defense, robotics and computers to industrial equipments vis-à-vis mining industry, pharmaceuticals, ball-bearing, banking and appliance manufacturing. The family name and its corporate influence is rarely mentioned in the public discourse, which corresponds to the family’s motto Esse, non Videri, translated into ”to be, not to be seen” or alternatively, ”to act, not to seem to be”, adopted by the banker and industrialist Marcus Wallenberg Sr. (1864-1943) upon becoming a knight of the Royal Order of the Seraphim.1

The Wallenberg business empire is colloquially referred to as the Wallenberg sphere. The Wallenberg sphere is a large group of companies in which their investment conglomerate, Investor AB, which was formed in 1916 as an investment vehicle of Wallenbergs’ Stockholms Enskilda Bank, Foundation Asset Management AB, or Wallenberg Investments AB, has the controlling interest. The Wallenberg sphere‘s holdings, which amount to circa 400 companies in total, employ roughly 1 million people,2 and amount to approximately $800bn in market capitalisation.3456789101112131415161718

The Wallenbergs’ mechanism of exercising control and power lies in the system of differential voting rights where the Wallenbergs own the strong A-shares, the voting shares. The professor of economics and history at Harvard, David S. Landes, writes in his book Dynasties,

Take the Wallenbergs’, Sweden’s first business family. They made their start in banking, with the Stockholm Enskilda Bank, founded in 1856 by André Oscar Wallenberg. From there they moved out into industry, founding or acquiring an array of the leading multinationals in their country: ASEA (today ABB), Electrolux, Ericsson, Saab-Scania, SKF, Stora Enso. At the end of the 20th century, these firms made up some 40 percent of Sweden’s capitalization on the exchange. The Wallenbergs’ would not necessarily hold a large part of the stock of these firms, but typically they held most of the votes because they knew how to lend.

For the British review the Economist, the Wallenbergs’ are the outstanding European industrial dynasty, five generations of highly successful entrepreneurs. For their family historian David Bartal, they are a Japanese-style family, Europe’s most powerful of its kind, more discreet than the Agnellis’ and richer than the Rothschilds’. Add up the sales of all the companies in the Wallenberg empire at the close of the 20th century, and you will find that one had more than ninety billion dollars a year, ahead of British Petroleum, IBM or General Electrics. It was then Europe’s largest private-sector employer by sales after Shell. But look for ”Wallenberg Inc.” you would be disappointed. Discretion above all. 19

David S. Landes, Professor of Economic History at Harvard University, Dynasties: Fortunes and Misfortunes, of the World’s Great Family Businesses

The Wallenberg Foundations is the collective name for the 16 private and public foundations formed by the Wallenberg family, of which Knut and Alice Wallenberg Foundation controls the investment conglomerate Investor AB (50% voting). The Wallenberg Foundations fund research in technology, medicine, natural sciences, social sciences and culture. The financial and administrative matters of the 16 foundations and Wallenberg Investment AB are managed by Wallenberg Foundations AB. Wallenberg Foundations wholly control Wallenberg Investment AB, which in turn wholly controls Foundation Asset Management and Navigare. The largest foundations are the following,

Investor AB

As of 2023, the Wallenbergs’ investment conglomerate Investor AB, which is controlled by the Wallenbergs through Knut and Alice Wallenbergs Foundation, is the largest institutional holder (with the exception of AstraZeneca), and typically have the controlling interest, of the multinationals

  • Atlas Copco (22.3% voting 20) — world-leading provider of compressors, vacuum solutions and air treatment systems, construction equipment, power tools and assembly systems.
  • ABB Group (13.5% voting 21) — world-leading supplier of electrification and automation, operational in 100 countries.
  • AstraZeneca (3.3% voting 22) — Europe’s 3rd-largest pharmaceutical company
  • Ericsson Group (23.8% voting 23) — world-leading provider of Information and Communication Technology, operational in 180 countries.
  • Husqvarna Group (33.4% voting 24) — world’s largest manufacturer of outdoor solutions.
  • Nasdaq, Inc. (11.8% voting 25) — largest stock-exchange company worldwide.
  • Epiroc (22.7% voting 26) — leading productivity partner for the mining, infrastructure and natural resources industries.
  • Skandinaviska Enskilda Banken (21% voting 27)— third-largest bank in Scandinavia and second-largest bank in the Baltics.
  • Swedish Orphan Biovitrum (34.7% voting 28) — biopharmaceutical company dedicated to treatments in the areas of haematology, immunology.
  • Saab Group (39.7% voting 29) — 6th-largest aerospace and defense company in Europe, supplier of aerospace, submarines, computer systems, missile systems, helicopters, weapon systems.
  • Electrolux (30.4% voting 30) — second-largest appliance maker worldwide.
  • Wärtsilä (17.7% voting 31) — global leader in innovative technologies and lifecycle solutions for the marine and energy markets.
  • Elecrolux Professional (32.4% voting 32)
  • EQT Partners (14.7% voting 33) — third-largest private equity firm worldwide.

Patricia Industries

....MUCH MORE, he's just getting warmed up.