Stroll round Colombia’s 2d town Medellín and you might be by no means a ways from a financial institution, place of job or store this is managed someway or different by way of the Grupo Empresarial Antioqueño, probably the most tough alliance of businesses within the country.
On side road corners, there are branches of Bancolombia, the rustic’s largest financial institution. Inside gleaming glass towers sit down the headquarters of Grupo de Inversiones Suramericana, Colombia’s greatest monetary conglomerate, which holds stakes in banking, insurance coverage, pensions and asset control. Purchase meals within the town’s supermarkets and the likelihood is that it’s produced by way of Grupo Nutresa, which began existence as a Medellín chocolate-maker over a century in the past and is now one in all Latin The united states’s largest processed meals corporations.
These kinds of corporations, and over 100 extra, are a part of the GEA, a community of corporations in Medellín and the encircling division of Antioquia related to each other thru a fancy internet of cross-shareholdings and circle of relatives ties. Between them they account for over part the worth of the Colcap, the principle index of the Colombian inventory alternate.
The gang’s construction, very similar to Japan’s keiretsu, wherein corporations shape shut affiliations with every different, has made those corporations virtually unassailable to outdoor takeovers. Certainly, because of this the gang used to be arrange within the first position, to give protection to Medellín-based corporations from takeovers from Bogotá within the Seventies.
However now, as by no means earlier than, the GEA is below assault.
Past due final yr, Colombian businessman Jaime Gilinski, in partnership with the Abu Dhabi royal circle of relatives, introduced a sequence of antagonistic soft gives to crack open the GEA’s tight-knit construction. Gilinski says the corporations have failed their traders.
“The control used to be now not being attentive to shareholders,” he informed the Monetary Occasions in a contemporary interview in London. “The cross-shareholdings have been nice for the managers to stay keep an eye on, however what have been the shareholders getting?”
The Gilinski bids have shaken up Colombia’s another way moribund inventory alternate and despatched ripples right through the area, the place antagonistic takeover bids are reasonably uncommon.
“We’ve had takeovers earlier than in Colombia however the distinction this time is they’re antagonistic, they usually’re large,” stated Juan Camilo Jiménez, head of equities at Credicorp Capital in Bogotá. “Those are tough corporations, now not simplest on account of their weight at the inventory marketplace but additionally on account of their significance at a countrywide and regional degree.”
Gilinski’s six successive bids have focused the 3 core GEA corporations — Sura, Nutresa and business conglomerate Grupo Argos. Gilinski and his companions have spent round $2.8bn — greater than part his non-public internet value, in keeping with Forbes — and feature signalled their intent to stay going.
They now personal 38 consistent with cent of Sura and 31 consistent with cent of Nutresa. That provides them oblique stakes in Bancolombia and different vital GEA corporations.
However the GEA is preventing again. Its corporations have made strategic appointments to their forums to do away with conflicts of hobby amongst board participants, letting them maximise their vote casting capability within the face of Gilinski’s attack.
“That has made Gilinski’s goal of unravelling the GEA from inside of a far tougher proposition,” stated Luis Ramos, senior Colombia analyst at regional asset control company LarrainVial.
The ones running at GEA corporations spoken to by way of the FT — at Sura, Argos and effort corporate Celsia — reject Gilinski’s criticisms that they’ve failed traders.
“The worth of Grupo Sura’s general fairness has grown 36 occasions in measurement during the last twenty years,” leader govt Gonzalo Pérez informed the FT in an interview in Medellín. “Our dividends over the similar duration have grown at a compound annual expansion charge of 10 consistent with cent consistent with yr.”
In addition they argue they must be judged now not simplest on their proportion costs and go back on funding but additionally on their contribution to native communities. Sura has ploughed round $70mn during the last decade into social, tutorial and cultural initiatives in Colombia and somewhere else in Latin The united states.
“Those corporations have supplied social and financial price in probably the most advanced occasions each in Medellín and the rustic as a complete,” stated María Bibiana Botero, govt director of Proantioquia, a basis that promotes building within the area. “They stood company throughout the drug violence, and not too long ago throughout the [coronavirus] pandemic their contributions have been decisive in coping with the scientific emergency within the area. They stored lives.”
However the workforce has its critics even in its Medellín stronghold, amongst them the outspoken leftwing mayor Daniel Quintero, who, in an interview this yr with Semana, a information mag that Gilinski purchased in 2020, named the GEA amongst a gaggle of entities that he claims have sacked town’s funds.
Alternatively, Quintero has supplied no proof for his claims and declined to talk to the FT for this text. One of the GEA corporations have threatened to sue Quintero for defamation.
The result of the struggle will probably be felt past Colombia’s borders. Between them, GEA corporations succeed in a ways past the rustic. Grupo Sura operates in 11 nations in Latin The united states. Nutresa exports to over 70 countries international.
The GEA generate kind of 6 consistent with cent of Colombian GDP, in keeping with Proantioquia.
“The GEA corporations were one of the crucial engines of building within the area and feature micromanaged each and every a part of public coverage in Medellín and Antioquia for many years,” stated Javier Mejía, a Colombian economist who has researched the gang intensive. “For a very long time, they have been in point of fact the one channel in which folks may just get entry to the formal economic system in Antioquia.”
For now it looks as if Gilinski’s bids can have stalled. His most up-to-date stakebuilding at Nutresa in Might and Argos in July fell in need of the extent he used to be in quest of.
LarrainVial’s Ramos predicted this may suggested “a pause within the Gilinski as opposed to GEA saga” over the following couple of weeks and months. Alternatively, he added: “however Gilinski’s heavy funding in GEA corporations suggests this isn’t the final instalment”.