Swedish Match

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Fane, Malachy, “The Swedish Juggler,” New Republic, vol. 71, Jul. 13, 1932, at 239. “Financial World Not Yet Sure What Kreuger Suicide Means,” Business Week, Mar. 19, 1932, at 5. Flesher, Dale L. and Tonya K. Flesher, “Ivar Kreuger’s Contribution to Financial Reporting,” Accounting Review, vol. 61, no. 3, Jul. 1986, at 421-34. Flynn, John T., “Kreuger: Another Holding Company Debacle,” New Republic, vol. 71, May 25, 1932. “Four Masters of Fraud,” Newsweek, vol. 49, Apr. 11, 1957, at 94. Galbraith, John Kenneth, “How to Become an International Swindler,” Reporter, vol. 16, Mar. 21, 1957, at 45. “German Matches; Strike a Light,” Economist, Jan. 22, 1983, at 66. Hertzberg, Sidney, “Aftermath of the Kreuger Crash,” Current History, vol. 39, Nov. 1933, at 239. Hertzberg, Sidney, “Ivar Kreuger’s Liabilities,” Current History, vol. 37, Nov. 1932, at 233. “High Finance: The House of Matches,” Time, vol. 46, Nov. 5, 1945, at 88. “Kreuger Finale,” Time, vol. 28, Jul. 13, 1936, at 66. Labaton, Stephen, “Archives of Business: A Rogues Gallery; Ivar Kreuger: Sweden’s Match King,” The New York Times, Dec. 7, 1986, sect. 3, at 23. Lambert, Richard, “Shady Dealings on the Grandest Scale,” Financial Times, Aug. 15, 1984, at 9. Lazar, Maria, “Is Kreuger Dead?,” Littell’s Living Age, vol. 344, Mar. 1933. Lebergott, Stanley, “The Shape of the Income Distribution,” American Economic Review, vol. 49, Jun. 1959, at 328. Lewinsohn, Richard, “Second Thoughts on Kreuger,” Littell’s Living Age, Jun. 1932, at 318. Lundberg, Erik, “The Rise and Fall of the Swedish Model,” Journal of Economic Literature, vol. 23, Mar. 1985, at 1. Lyons, Eugene, “Interviewing the Titans,” Saturday Review of Literature, vol. 18, Oct. 22, 1938, at 6. Marcosson, Isaac F., “An Interview with Ivar Kreuger,” Saturday Evening Post, Apr. 2, 1932, at 3-5. Marcosson, Isaac F., “The Match King,” Saturday Evening Post, Oct. 12, 1929, at 3-4. 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"Ivar devised a more elegant solution to this problem. It was an ingenious piece of financial engineering that would survive the test of time. Ivar decided to introduce a new type of security, which he called a “B Share.” Ivar began with Swedish Match. He divided its common shares into two classes. Each class would have the same claim to dividends and profits, but the B Share would carry only 1/1000 of a vote, compared to one vote for each A Share. It was a simple, but profound, insight. B Shares could be sold to investors without affecting control.20 Ivar could double the size of his capital, while diluting his control by just a fraction of a percent."

"Procuritas, as he named his company, made deals worth several billion kronor between 1986 and 1990. The biggest—and worst—was the purchase of the match and tobacco company Swedish Match from the forestry company Stora. Together with a couple of other financial players, they bought the company out from the stock exchange in 1989. – We made all the classic mistakes; we paid too much, we borrowed too much, and we assumed we could quickly sell several of the subsidiaries—lighters, matches, and razor blades—to get money and pay off part of the debt. The forecasts were derailed by the Gulf Crisis, when Iraq invaded Kuwait. Business came to an abrupt halt, nothing could be sold, interest costs accumulated. The other owners wanted out and “we were too small to decide, so we were forced to sell too early; otherwise, it could have turned out well,” Mikael recalls. After that, he was more cautious about leveraging the companies. In this way, he differed from his successors."

"Volvo’s then-CEO PG Gyllenhammar, who for many years was considered Sweden’s most powerful person, was one of those who bought into this reasoning. Among other things, he added the food company Procordia and the pharmaceutical company Pharmacia to his automobile business. A group like the forestry company Stora owned Swedish Match, which in turn not only produced matches, but also building materials, flooring, cardboard, and machines for fish gutting. Nokia manufactured such diverse products as televisions and rubber boots."