The IPO That Was Never an Exit

Going Public Without Letting Go

Most executives treat a public listing as an exit or the beginning of diluted control. The Kronseder family treated theirs as fuel for what came next.

When Krones AG went public in 1984, it used the listing to finance acquisitions, expand its capabilities, and build a global bottling machinery business whose name rarely appears on the products it helps create.

Four decades later, the founding family still controls 51.9% through a private pooling agreement.

Krones shows that an IPO does not have to mark the end of a family enterprise. Structured carefully, it can finance its next generation of growth.

Case Study: How Krones Used an IPO to Keep Building

In 1951, 26-year-old prisoner-of-war survivor Hermann Kronseder opened a 100-square-meter workshop in Neutraubling, Bavaria. He began drawing labeling-machine designs at his kitchen table and sold his first prototype to a skeptical local brewer.

By 1956, his fully automatic labeler processed 4,500 bottles per hour. Its continuous-motion design gave one Krones machine the output of ten competing American models.

The next breakthrough came in 1975. Kronseder connected the filling machine, capper, and labeler into one system without conveyor belts between them.

The industry considered the design outlandish. But it transformed Krones from a component supplier into a systems integrator. Customers no longer bought individual machines. They bought a complete production line.

Kronseder’s instinct was to keep building, not cash out.

In 1980, with turnover reaching 100 million Deutsche Marks, he converted the partnership into a public stock corporation. The 1984 IPO then gave Krones greater access to capital, acquisition currency, and international credibility.

Krones used that platform to broaden its capabilities. It acquired Zierk for bottle-washing technology in 1988 and Kettner for packaging machinery in 1998, building an increasingly complete beverage-production system.

The family did not treat the listing as an exit. Through a civil-law pooling agreement, the Kronseder family retained 51.9% of the company, preserving Krones as a family-controlled enterprise while public capital funded its expansion.

That structure also gave Krones room to make long-term technology bets. Its 1997 move into PET stretch blow molding positioned the company for the shift away from glass. The 2024 acquisition of Netstal Maschinen completed a PET offering stretching from preform production through bottling, filling, and recycling.

The results are substantial. According to its 2024 results, Krones generated €5.29 billion in revenue, up 12.1% year over year. Order intake reached €5.46 billion, while EBITDA margin and return on capital employed both reached company records.

Krones now employs more than 20,000 people, with over 90% of revenue generated outside Germany. Its machines serve companies including Coca-Cola, PepsiCo, AB InBev, and Heineken, even though the Krones name appears on none of their packaging.

The company went public without beginning a family exit. The listing financed the acquisitions and technologies that turned a Bavarian workshop into a global production-systems company.

Krones offers a useful counterexample for family enterprises considering outside capital: an IPO does not have to reward the end of the founder’s work. Structured carefully, it can finance the next generation of it.

From Family Ownership to Expansion Architecture

1. Sell Enough to Grow, Not Enough to Lose Direction

A public listing does not require founders to surrender authority in proportion to the capital they raise. Heineken demonstrates the distinction. Its controlling family holds just over 50% of Heineken N.V. through a private holding company, giving the business access to public capital while preserving the power to reject unwanted deals, including SABMiller’s acquisition approach.

The family did not need to own everything. It needed enough authority to keep expansion aligned with its long-term direction. Public investors could finance growth without gaining the power to turn that growth into an exit.

2. Define the Boundaries Before Capital Arrives

Outside capital becomes dangerous when the rules governing it remain unclear. L’Oréal’s Bettencourt Meyers family holds 34.76% of the company, while a regulatory waiver caps its voting rights at 33.33%.

The arrangement gives public investors room to participate while preserving a stable center of strategic influence. The broader lesson is not to maximize family power. It is to decide which decisions outside capital may influence before that capital becomes essential.

3. Split the Vote From the Dividend

Most dual-class structures give founders more influence than their economic stake would ordinarily permit. Comcast built that imbalance directly into its charter.

Brian Roberts owns every Class B share, giving him a generally non-dilutable 33⅓% of the company’s voting power despite holding only a small fraction of its total equity. The shares also carry separate approval rights over mergers, major asset sales, and changes that would weaken their authority.

Public investors own nearly all the economics, but the founder’s son retains an enduring veto over decisions that could reshape the company.

4. Design Control No Heir Can Sell

The furthest extension of this logic removes the family’s personal ownership altogether. The Mahle brothers transferred 99.9% of their automotive company to the nonprofit MAHLE Foundation, while the remaining 0.1% went to MABEG, an independent association holding all voting rights.

The structure separates economic ownership from governing authority so completely that no descendant can inherit enough of either to sell the company. Profits support the foundation’s charitable work, while MABEG protects the enterprise’s independence across leadership generations.

Permanence no longer depends on family cohesion because the family no longer possesses a controlling stake that can fracture or be cashed out.

From strategy to legacy

Krones’ growth reveals a deeper ownership discipline: outside capital does not have to begin an exit. It can finance the next chapter.

The distinction lies in deciding what the business needs money to build and which decisions must remain anchored while it builds it. Capital expanded Krones’ capabilities without replacing the family’s long-term direction.

The strongest owners do not preserve control by refusing outside capital. They preserve it by using that capital to build something the next generation will still be positioned to lead.

- Legacy Beyond Profits