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FB Roundup: Birkenstock, Tata Group, Las Vegas Sands

End of a 247-year era as Birkenstock sells control to Bernard Arnault, Tata Group finalising e-commerce BigBasket deal, Sheldon Adelson’s Las Vegas Sands exits The Strip for Asia.

End of a 247-year era as Birkenstock sells control to Bernard Arnault

Germany’s sixth-generation Birkenstock family will sell a majority stake in its historic footwear business to the family interests of Bernard Arnault, principal of French luxury goods empire LVMH.

The Neustadt-based comfortable “footbed” sandal maker, which dates back to 1774, announced it had agreed to sell the controlling stake to L Catterton, the $23 billion US-French private equity company co-founded by LVMH, and its affiliates including Financiere Agache, a holding company controlled by the family investment firm Groupe Arnault.

The size and price tag off the stake was undisclosed, but speculation suggested 60-70% and the estimated value of Birkenstock was €4 billion ($4.7 billion). Billionaire brothers Alex, 52, and Christian, 48, Birkenstock were to retain minority shares.

The formerly wholly-owned family business said the brothers and their management struck the deal after examining all options. The expansion of the company's shareholders was the “next logical step” to grow in China and India. Birkenstock would expand in Europe and the United States by investing in its German sites and bolster production, logistics and sales operations. The company planned to invest in the development of its direct-to-consumer business and the expansion of its e-commerce platforms.

“For the next 250 years we need partners sharing the same strategic and long-term vision as the Birkenstock family,” Christian and Alex Birkenstock said in a statement.

“In L Catterton and Financiere Agache, we have found those partners. They bring both a deep understanding of the details of a manufacturing business that is all about quality and a respect for brands with a long heritage like ours. We look forward to taking the next steps with our partners and carrying our family business into an even brighter future.”

The sale was the latest distancing step taken by the contemporary descendants of the founding 18th century cobbler Johann Adam Birkenstock in less than a decade. The Birkenstock Group was formed under the leadership of Oliver Reichert (pictured above left) and Markus Bensberg ( above right), the first non-family chief executives in 2012. Stephan Birkenstock, a third brother, sold his shares in 2013.

The professionalised group approach brought the family business double-digit sales growth every year. Sales of casual and comfortable footwear and clothing have increased under coronavirus stay-at-home restrictions, making Birkenstock an attractive investment proposition.

Bernard Arnault (pictured right) said Birkenstock had grown to become one of the few iconic brands in the footwear industry.

“We truly appreciate brands with this long heritage, and accordingly, I am delighted that Financiere Agache, my family investment company, will invest in the company alongside L Catterton, with whom we have a longstanding and close partnership. Together we will provide support to the business so it can fully realise its significant growth potential.”

Tata Group finalising e-commerce BigBasket deal

Indian family business Tata Group is finalising its acquisition of the controlling share in the online grocery retailer BigBasket and awaits approval from the country’s competition regulator.

The $106 billion, Mumbai-headquartered conglomerate looked to expand its consumer portfolio with a 68% stake in India’s largest online food and grocery store, according to reports. The deal was signed in February and valued BigBasket between $1.8 billion to $2 billion.

The 10-year-old e-grocer raised more than $750 million prior to the deal with Tata. Alibaba, the Chinese ecommerce giant founded by billionaire Jack Ma, which held a 28-29% stake in the e-grocer was expected to exit, along with other early investors.

Also in February, Tata reportedly lodged its plan with the Reserve Bank of India for a national e-payments network.

The BigBasket acquisition would tie together Tata Group’s e-commerce platform Tata CLiQ, online grocery store StarQuik and electronics store Croma with a digital “super app” as the gateway for consumers. The delayed official launch of the app had been rescheduled for 3 March, 2021, the birthday of Jamsetji Tata, the “father of Indian industry”, who founded the original trading firm in 1868. However, the BigBasket deal was still being reviewed by the Competition Commission of India.

The Indian online grocery market size was valued at $2.9 billion in 2020 and was expected to grow 37% annually from 2021 to 2028 as consumer habits change, according to market research. With BigBasket in its arsenal, Tata has Jeff Bezos’ Amazon, Mukesh Ambani’s Reliance and Walmart’s Flipkart in its sights for India’s $850 billion retail sector.

Natarajan Chandrasekaran (pictured right), 57, the first non-family chairman of Tata Group’s parent holding company Tata Sons, has made digital transformation and a simplified, synergised and scaled-up “One Tata” his agenda since his appointment in 2017.

In 2019-20, the revenue of Tata companies, taken together, was $106 billion. The companies employ more than 750,000 people. There are 29 publicly-listed Tata enterprises, in 10 clusters, operating with its own board of directors. The combined market capitalisation was $123 billion, as of 31 March, 2020.

Industrialist Ratan Tata (pictured above), 83, the great-grandson of Jamsetji Tata, was the chairman of Tata Sons, from 1991 until he retired in 2012. Under his leadership, the family business went global, with major blue-chip acquisitions for UK tea brand Tetley, UK automaker Jaguar Land Rover and Anglo-Dutch steelmaker Corus. The philanthropist became chairman emeritus of Tata Sons, Tata Industries, Tata Motors, Tata Steel and Tata Chemicals in 2012.

Sheldon Adelson’s Las Vegas Sands exits The Strip for Asia

The casino resort empire of billionaire Sheldon Adelson is cashing out of Las Vegas and placing all its bets on Asia, less than two months after its founder died aged 87.

Las Vegas Sands announced its agreements to sell its Las Vegas property and operations, including The Venetian Resort Las Vegas and the Sands Expo and Convention Center, collectively known as The Venetian, for $6.25 billion. VICI Properties, a New York-based investment trust, which already owns Caesar’s Palace, will acquire the real estate assets for $4 billion. Apollo Global Management, a New York-headquartered alternative asset manager, will take the operating assets and liabilities for $2.25 billion.

US casino mogul Adelson (pictured left) built the $1.5 billion resort The Venetian, a Venice-themed resort hotel and casino, after he was inspired while on his honeymoon with Miriam Adelson, 75, in the Italian lagoon city. The resort opened in 1999.

Las Vegas Sands (LVS) executives said while selling The Venetian will be “bittersweet”, the opportunities for the company to pursue new growth prospects were robust.

“The Venetian changed the face of future casino development and cemented Sheldon Adelson’s legacy as one of the most influential people in the history of the gaming and hospitality industry,” Robert Goldstein (pictured right), 64, succeeding non-family LVS chairman and chief executive, said.

Adelson, who was the company's founder, chairman and chief executive, died on 11 January from complications related to the treatment for non-Hodgkin lymphoma. He was worth an estimated $35 billion and was ranked by Forbes as the 15th richest American in 2005.

However, casino operators have been hammered especially hard by Covid-19 travel and social distancing restrictions. LVS declared a $1.69 billion loss for 2020, the biggest in its 33-year history, compared to its operating income of $3.7 billion in 2019.

Adelson expanded LVS into Asia, starting with the luxurious Sands Macau in 2004, in the only legal gambling hub in China, and Singapore’s Marina Bay Sands in 2010.

His widow, Miriam Adelson, reportedly holds a 56% stake in LVS through her personal ownership and family trusts. Long-serving executive Goldstein was the de facto principal while Adelson’s health deteriorated and was confirmed as his successor in January after Adelson died.

Goldstein said LVS was focused on growth and saw “meaningful opportunities” on a variety of fronts.

“Asia remains the backbone of this company and our developments in Macao and Singapore are the centre of our attention.”

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