Jorge Paulo Lemann Photographer: Dania Maxwell/Bloomberg
BRASILIA: Jorge Paulo Lemann, the billionaire Brazilian dealmaker, says that together with his long-time partners, he’s trying to save retailer Americanas SA after a massive US$5bil fraud pushed it into bankruptcy protection.
The trio of investors, that includes Marcel Telles and Carlos Sicupira, have owned Americanas since the early 1980s and their stake stood at about 30% when the scandal broke.
Now, in the midst of a debt restructuring and recapitalisation, they’ll own about half of the business.
“We had a crisis in one of our companies, the first company we bought,” Lemann said in reference to Americanas, a bargain price retailer with stores nationwide. “We have to deal with it. We’re dealing with it. It has 30,000 employees so we’ve got to try to save the company.”
The company has cast blame on the previous management team that was led by Miguel Gutierrez, saying that he misled the board and hid certain accounts linked to marketing contracts and supply-chain financing to inflate results.
While Americanas makes up a fraction of Lemann’s fortune of some US$23bil, according to the Bloomberg Billionaires Index, the scandal has been a stain on his long illustrious investing career.
The lead shareholders are putting up 12 billion reais (US$2.4bil) to recapitalise the firm and have pledged not to sell shares for at least three years.
Beyond a joint statement in early 2023, it’s the first time Lemann has talked publicly about the accounting fraud at Americanas. His partner Sicupira has long been more active in the company and still sits on the board.
Lemann, 84, is most well-known for co-founding buyout firm 3G Capital and separately building a brewing empire that eventually lead to the takeover of Anheuser-Busch to create AB InBev SA, the world’s largest beer maker.
Through 3G, Lemann and his partners bought Burger King and other fast-food chains and wrapped them into Restaurant Brands International Inc. They also partnered with Warren Buffett to buy Heinz, then Kraft and merged them together.
The market value of Americanas has shrivelled to just 500 million reais (US$98.7mil) from 10.5 billion reais before the crisis in early 2023.
In other comments that echoed the Americanas saga, he stressed the importance of trust and how people can change over time.
“If you’re delegating, you’re running risks, also. We’ve done very well with delegation but there are problems here and there. People don’t turn out exactly like you thought they would or they react differently,” Lemann said.
During the almost hour-long conversation for Harvard’s 10th annual Brazil Conference, Lemann also spoke about surfing and playing tennis in Rio de Janeiro when he was young, his initial difficulties with his Harvard coursework and his first business ventures.
He encouraged students to take risks and get real-life experience instead of rushing straight into business school.
On governance issues, he also talked about the process of preparing to hand off control to the next generation.
“We who built up these businesses and operated them in the past are not going to be able to operate them anymore because we’re getting older,” Lemann said.
“We have to create a system of working through boards and a different kind of governance than we had in the past when we were there pushing things ourselves.” —Bloomberg
