Sonae is a conglomerate, and is the largest private employer in Portugal with a strong appeal to senior managers and young graduates. Its president and main shareholder is Belmiro de Azevedo, one of the most influent Portuguese businessmen and a Forbes fortunes figure. Sonae was originally an acronym standing for Sociedade Nacional de Estratificados (roughly, National Company of Engineered wood). Engineered wood were the company's original line of business.
Another sub-holding, Sonae Indústria, was spun-off to Sonae SGPS shareholders in November 2005. Of the remaining four sub-holdings, all but Sonae Sierra are majority-owned and controlled by Sonae SGPS; Sonae Sierra was also majority-owned by Sonae SGPS (under the name Sonae Imobiliária) but since January 2006 became a 50/50 joint-venture with UK's Grosvenor, with Sonae retaining effective management of the company.
The role of Sonae SGPS SA is to manage the portfolio while it is the job of its sub-holdings to manage the businesses.
The formal management body of Sonae SGPS SA is the Board of Directors. Over and above the Boards of Directors of the holding and subholding companies, and to ensure greater synergy of capabilities and key competencies, the following non-statutory bodies exist:
During its first twenty years of existence, Sonae stayed as a small to medium-size business, focused on the wood derivatives market. During the 1980s, the company began a period of rapid growth, which coincided with Portugal's entry in the European Union. Holding company Sonae Investimentos SGPS (Sociedade Gestora de Participações Sociais), SA (Sociedade Anónima) was created and successfully floated in the Lisbon Stock Exchange in 1985. During this period, Sonae began a process of diversification through the acquisition of a supermarket chain, followed by the launch of the first hypermarket in Portugal, which in turn led to the development of the shopping center business.
The creation of Sonae Imobiliária (Real Estate) represented thus a natural progression, its main objective being the construction of shopping centers anchored by Sonae stores. Sonae Imobiliária opened CascaiShopping in 1991 - the first regional shopping center built in Portugal, and Centro Colombo in 1997 - the first super-regional shopping center and still the biggest in the Iberian Peninsula.
At the same time, Sonae invested in many different areas such as telecommunications, information technology, leisure and tourism.
In 1996, as the challenge of international expansion of its different businesses and the need to concentrate management resources in their development was too apparent, it was decided to split the holding company in two. Thus, sub-holdings Sonae Indústria (already present in Spain, United Kingdom, Canada, Brazil and South Africa) and Pargeste (non-strategic businesses), plus new and emerging businesses (including software and telecommunications) were spun-off into a new holding company called Inparsa SGPS, SA. Sonae Investimentos SGPS became a holding company totally dedicated to modern retail business.
In September 1999, the realization that two holding companies were not as effective in creating critical mass as only one, led to the reversal of the 1996 decision. Sonae Investimentos SGPS reacquired Inparsa SGPS and simultaneously acquired Figest, a personal holding of Sonae's President. At the same time, the formal name Sonae Investimentos SGPS, SA was simplified to Sonae SGPS, SA. Sonae's systematic use of its name across the group multiplies its public notoriety. Its portfolio of businesses now ranges from retail and real estate activities through to wood products, tourism, fixed and mobile telecommunications, construction, transport, the media and risk capital.
Sonae's remarkable success as a growth company can be attributed to four factors:
Belmiro de Azevedo's shares were acquired to the estate of late banker Afonso Pinto de Magalhães who, through his Banco Pinto de Magalhães, fully owned Sonae. Magalhães put Belmiro de Azevedo in charge of Sonae during the turbulent years following the 1974 Revolution that culminated in the seizure of the company by the Government. It was the success in keeping the company running during these years, plus the also successful reclaiming of the company ownership, that led the deceased banker's family to cede the control of Sonae to Belmiro de Azevedo, but not before a protracted legal battle between him and the banker's sons, whom Belmiro de Azevedo accused of incompetence and cockiness