Oetker Group: family divides companies – economy

They have already moved. When it comes to family matters, the rich can sometimes be quite ordinary: when the family falls apart, some move. A few weeks ago Alfred, Ferdinand and Julia, the children of the third marriage of food manufacturer Rudolf-August Oetker, left the old world Oetker in Bielefeld with their company Geschwister Oetker Beteiligungen. This emerges from the entries in the commercial register. Your business is now a quarter of an hour’s drive away, in another neighborhood. Distance can be good for a relationship.

The move is part of the split the family announced this summer and has now taken place. The two companies, now separate, announced Tuesday. This is how the long-standing feud between the five children of Rudolf-August Oetker’s first two marriages and the three youngest descendants should end. Internally, we talk about “G5” and “G3”, which reads as if it were an alliance of states. Measured in terms of annual sales, the family lines of the five oldest children get the biggest bite of over five billion euros. Nevertheless: the world Oetker, one of Germany’s best-known family businesses, is shrinking.

Like a textbook, the case shows the dilemma of family businesses. The worlds collide in the word: family and business. It is a paradoxical system. The company is focused on the thing, on products and services, on the efficient execution of tasks. Families are the opposite. Ideally, they are not based on soberly calculated goals, but rather on the basis of great feelings. “The strength of a family business lies exactly where its risk lies – in the family”, Alfred Oetker likes to spread such wisdom, one of the “G3”. He should know: in his doctoral thesis he dealt with “stakeholder conflicts in family businesses” – and also how to resolve them.

The quarrel began after the death of Rudolf-August Oetker in 2007. The patriarch already bears all the past in his name: the first names of his grandfather, the founder of the company August, and of his father Rudolf, who died during World War I. Rudolf-August Oetker wanted harmony between the heirs. At the turn of the millennium, he gave each of his children 12.5% ​​of the business.

When making important decisions, family lines got stuck

“Eight children equally is an absolute disaster,” said Würzburg expert Dieter Salch, 81: “Leaving each child the same share has nothing to do with love or justice. Ammunition is included. with the death of the testator. ” The lawyer has taught at the University of Würzburg for many years and has advised a few hundred family businesses in his law firm and audit firm. He now runs the business alone. Oetker is not one of his clients. Salch advises entrepreneurs, when it comes to inheritance, to always “give control, it’s up to you.” This should be clearly stated in contracts and in the will. “Clear contracts prevent disputes,” says Salch. If the family quarrels, there is a risk of stagnation. “Family businesses that are at a standstill have no chance.” The competitive pressure in the age of digitization and globalization is too strong.

The Oetkers have complicated their lives. The “G5” has repeatedly prevented one of the “G3s” from entering the board of directors. When August Oetker, who had been at the helm for almost three decades, had to step down from management for reasons of age, his younger brother Richard took over in 2010. His successor first arrived in 2017. : CFO Albert Christmann rose to the top.

The “G3” in turn prevented the merger of own shipping company Hamburg Süd with competitor Hapag-Lloyd in 2013, which the older half-siblings had requested. Because for each resolution which modifies the structure of the group, a majority of three quarters is required in general assembly. Another legacy. The “G3s” bring it closer to 37.5%. If they don’t follow, nothing works. Four years later, Hamburg Süd joined the Danish company Maersk; the Oetker group then halved its annual turnover. In the meantime, the group has also sold its Bankhaus Lampe to Hauck & Aufhäuser, a subsidiary of the Chinese group Fosun. The disintegration began before the split.

By separating from “G5”, brothers Alfred and Ferdinand Oetker are now fulfilling their long-standing wish to take on responsibilities as general managers. They want to run their new business around sparkling wine and chemistry, hospitality and art as co-bosses “in partnership”, he said in a message. His sister Julia wishes to participate in the strategy “as a partner”, but does not wish to enter into management. “Today begins a new chapter in the history of the Oetker family”, says Alfred Oetker. The company called Geschwister Oetker has a good 8,000 employees and an annual turnover of almost two billion euros.

Oetker is not the first family of entrepreneurs to go their separate ways

The split of the Oetker group was not an easy undertaking, as it consisted of more than 400 individual companies. The Oetkers operate in competitive markets: food and beer, spirits and hotels. Competitors like Nestlé or Danone, Heineken or Anheuser-Busch Inbev are much bigger. Everyone is competing for space on retail shelves and online portals.

In Salch’s opinion, a breakup isn’t necessarily the worst way to go. There are different ways of doing this: the business is sold and the shareholders share the proceeds, some shareholders are compensated, or – as in the case of Oetker – the business is split. Shareholder compensation is also about financial strength, says Salch. This should not weaken the business financially. For Salch, the worst solution is to sell the business, because it would end up in the wrong hands and the family association would end up as entrepreneurs. “But what are shareholders doing with money these days,” says Salch, “They pay high taxes and maybe negative interest. And where do you invest? The best investment is still your own business.”

In any case, the Oetkers are not the first to separate because it no longer works together. The sons of the shoemaker Adolf and Rudolf Dassler could no longer support him in a company after World War II; one founded Adidas, the other Puma. The brothers Aldi Karl and Theo Albrecht went their separate ways from 1961. And the Bahlsen brothers had had enough of each other in 1999, they split the group into sweet and savory. A treat for the spectators is the public argument between the butchers Clemens Tönnies and the nephew Robert, at this moment peace has returned.

This is also not the first separation in the Oetker Empire. The family didn’t even have a bad experience with it. At the end of the 1950s, Rudolf-August Oetker handed over the Schwartauer Werke jam factory, the juice maker Altländer Gold and the Kochs Adler sewing machine factory to his older sister Ursula. Their son Arend Oetker renovates and sells juices and sewing machines. In the mid-90s, the Schwartauer Werke bought a Swiss baby food maker Hero, later Oetker turned everything upside down and moved the Schwartauer Werke under the Hero roof in Switzerland to save taxes. The portfolio also includes a stake in the seed company KWS. As the empire of Arend Oetker and his family grows, that of Bielefeld’s relatives collapses.

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