“An investment in knowledge pays the best interest.”
— Benjamin Franklin
Case Studies
Ayala Corp.
Authors: Belen Villalonga, Raphael Amit, Chris Hartman
Ayala Corporation is the oldest conglomerate in the Philippines and has been controlled by the Zobel de Ayala family for seven generations. Over the past 25 years, Ayala has evolved from a real estate family business into a highly diversified and professionally managed business group, with a significant number of non-family shareholders. Between the holding company and its four largest subsidiaries, the Ayala group accounts for a quarter of the market capitalization of the Philippines Stock Exchange. Provides data to assess the value created for Ayala's stockholders in the ten years leading up to 2006, when the transition to the seventh generation of the Zobel de Ayala family culminated.
Learning Objective: To investigate the unusual corporate structure, with both the family holding company and its subsidiaries being publicly traded, of Ayala Corp. Offers a unique opportunity to measure and discuss the value implications of corporate diversification for family and non-family shareholders. Facilitates a discussion of the issues associated with publicly traded family firms.
For more information or to buy this case visit: http://harvardbusinessonline.hbsp.harvard.edu/b01/en/common/item_detail.jhtml?id=207041
SUN Brewing
Authors: Raphael Amit and Belen Villalonga
The Khemka family of India--founders, managers, and majority owners of Russia-based SUN Brewing. The family is debating the merits of two main alternatives: To bring in a major global beer company as a strategic partner at this difficult time or to stay on as controlling owners, inject millions of dollars into the company from other parts of the family business group, and weather the storm until better terms can be expected from any outside provider.
Learning Objective: To highlight the role that family business groups can play as internal capital markets, particularly in emerging economies, where external capital markets are inefficient. Illustrate the risks of entrepreneurship in emerging markets.
For more information or to buy this case visit: http://harvardbusinessonline.hbsp.harvard.edu/b01/en/common/item_detail.jhtml?id=207022
Medco Energi Internasional
Authors: Raphael Amit, Belen Villalonga, Chris Hartman
In late 2004, Hilmi Panigoro, CEO of the publicly traded Indonesian oil company Medco Energi Internasional, is striving to regain majority control of the company his brother Arifin founded in 1980.
Learning Objective: To expose students to different capital restructuring transaction available to family firms, including leveraged buyouts and equity offerings, in a turbulent emerging markets setting. Students are required to evaluate the benefits and risks of the proposed financing plan from the perspective of both the controlling family and minority shareholders.
For more information or to buy this case visit: http://harvardbusinessonline.hbsp.harvard.edu/b01/en/common/item_detail.jhtml?id=207021
Kohler Co.
Authors: Raphael Amit, Belen Villalonga
Kohler Co., best known for its plumbing fixtures, is a large, private family firm. In April 2000, Herbert V. Kohler, Jr., chairman and CEO, has to decide whether to settle with the dissenters and, if so, at what share price. Students must identify and understand the different valuation assumptions that can lead to a wide range in price, including the applicability of discounts for lack of marketability and lack of control.
Learning Objective: To examine the valuation of privately held firms from the perspectives of the controlling shareholder(s) and minority shareholders.
For more information or to buy this case visit: http://harvardbusinessonline.hbsp.harvard.edu/b01/en/common/item_detail.jhtml?id=205034