Budweiser

The secretive Brazilian billionaire who owns Burger King, Budweiser and Heinz

Andrew Wilkinson's Billy of the Week is Jorge Paulo Lemann, the press-shy Brazilian behind 3G Capital, who buys old, simple, multi-generational brands using piles of debt and runs them better.

“if you think about the businesses that he owns, uh, you would know them. So for Burger King, Budweiser, Tim Hortons, Kraft Foods, Popeyes, Heinz Ketchup, right? So he basically goes out, he finds these amazing, you know, multi-generational businesses that have been around for 50+ years that do something very, very simple. It's just going to grow over time. He goes out, he usually raises a ton of debt, and then he goes and buys them and takes them over.”

The third-generation buyout: catch a great brand once it gets sloppy

3G's playbook: target proven, simple businesses run by a complacent third generation that has gotten rich and lost discipline, then buy with debt and tighten the operation.

“When they bought Budweiser, it was on the third generation. They'd gotten super rich, right? So it was like the first generation built it. The second generation, like, were amazing. They went to Harvard, they grew it. The third generation took over. They got sloppy, didn't really care about growth. They had fancy offices and private jets and stuff. And so when they bought it, they just look at it and go, oh, it's been run in a kind of a sloppy way and they've lost their discipline. We can buy it with a lot of debt and then we can just make it way better, pay off our debt, and then we own Budweiser.”

Steal thisHunt for proven brands run by a complacent third generation, buy with debt, and win by simply restoring operational discipline.