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Before the lecture, Joaquín Uriach, President of the Family Business Club, took the opportunity to formally introduce the Club. Mr. Uriach explained that the Club was created in response to the 'significant influence of family businesses in our economy (65% of the GDP) and their relevance to our alumni'. The numbers show the extent of this interest: since the Club was founded earlier this year, nearly one hundred alumni have joined. In fact, it has enjoyed the most growth of any ESADE Alumni club this year. Mr. Uriach encouraged the audience members to join ('if you haven't already'), saying the Club was open to 'anyone who works at a family business, as well as entrepreneurs aiming to become the first generation of a future family business'. Mr. Uriach noted that the Club plans to organise bold lectures on important topics such as professionalisation and succession. The first lecture, which focused on the sale of family businesses, was no exception. The special guest was Joaquim Agut, General Manager of CIRSA, who, according to Mr. Uriach, 'does not generally agree to speak at events of this sort.

Mr. Agut gave a brief overview of his career at his family's business, which was eventually sold. He noted: 'I don't like to think of it as a "sale" so much as a "transformation". This is always an option if you do things right'. Mr. Agut formed part of the third generation of a family business that eventually became the world's fourth largest electricity and electronics company. During his last year at the company, turnover reached 7 billion pesetas (42 million euros). Mr. Agut acknowledged that 'the family-business model facilitated the transition from the first generation to the second, because the activities were divided up and the responsibilities were well defined'. He discussed his early career and highlighted the 'altruism' of his generation, since 'work required a great deal of dedication - either you left the labour market or you were not highly valued'.

Mr. Agut explained that the company had two revolutionary ideas in the late 1980s that made the subsequent transition possible. The first idea was to focus on research and development at a time when few Spanish companies were investing in this area. The Agut family was sure of its decision. It created an R&D department with 120 engineers. This strategic decision allowed the company to 'become the R&D production centre for the competition', according to Mr. Agut. Major brands such as Siemens and General Electric began to buy the company's products. Internationalisation was the compan's second revolutionary idea. The production centres were moved to Turkey and Yugoslavia in order to take advantage of intensive labour and increase profits. As a result, the company obtained annual profits of 13%. Nevertheless, the management remained concerned about certain issues, such as the fact that the company reinvested every cent it earned. It also faced the challenge of international competition and global customers, which led to increasingly complex demands. The management was also concerned about the need for permanent growth and the profitability of investments: since the company was continually investing, its dividends never grew.

These challenges led Mr. Agut to consider transforming (selling) the company. After several days of discussions, the family accepted the idea with several conditions: the company's assets and staff must not be touched. The sales process took three years. The company received three firm offers: one from the United States and two from Europe. Finally, in 1992, the company closed the deal with the American firm, which demanded that Mr. Agut remain on board for three years. He reluctantly accepted, since it was an indispensable condition of the sale.

Mr. Agut offered several tips for family businesses negotiating a sale: 'Separate industrial activity from fixed assets. Don't back down from your hopes. Value your knowledge. Understand the role of the buyer. Have a small, cohesive team'. He also criticised his own error in hindsight, saying he had failed to eliminate unprofitable lines of business and failed to demand higher status or salary in exchange for staying at the company for three years.

In the second part of his lecture, Mr. Agut talked about being recruited by General Motors, where he ascended rapidly through the ranks to become the head of European operations. As a result, he became the highest-ranked Spaniard at any multinational enterprise. 'Being able to speak six languages helped me immensely', said Mr. Agut. His extraordinary strategic vision helped spark his rapid advancement within the company. After this long journey, Mr. Agut joined the CIRSA Group, a growing multinational with 16,000 employees in 70 countries.

After Mr. Agut's talk, Juan José Planes, President of the Konsac Group, led a round of questions from the audience.


Programme

Joaquim Agut is the General Manager of CIRSA, one of Spain's largest family-owned companies. He has seen various sides of the family business. He will give a talk on his experiences and encourage discussion in an open-format session at ESADE.

Mr. Agut will discuss his experience at the helm of his family's electric company and explain how they decided to sell the company to General Electric. He will talk about his time at General Electric, working alongside Jack Welch, and explain how he saw the family business from within a major multinational.

He will also discuss his current responsibilities as a liaison between two generations at CIRSA, his time sitting on the board of the family business, and his experience taking the family business public.


"Family Business from different professional points of view"

Lecture:
Joaquim Agut Bonsfills
General Manager of CIRSA

Introduction:
Joaquin Uriach
President of  the Family Business Club

Moderator:
Juan José Planes
President of Grupo Konsac

Date, time and venue:
16th of may 2007
At 7.30 pm
ESADE, building 1 - ESADEFORUM
Av. Pedralbes 60-62. Barcelona

For more information:
ESADE Alumni
Tel.: 902 420 020

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