Heineken’s Charlene de Carvalho: A self-made heiress

You might say that one life ended and another began the day that Charlene de Carvalho buried her father.

It was a gray day in Noordwijk, the Netherlands, in January 2002 when the London housewife and mother of five bid goodbye to Freddy Heineken. Charlene loathed fanfare as much as her father, a visionary businessman who had transformed a modest Dutch brewery into the world’s third-largest brewer. So this was a simple ceremony in an ordinary cemetery, with no funeral preceding it, attended only by Freddy’s secretary and his immediate family: Freddy’s wife, Lucille; his son-in-law, Michel; and 47-year-old Charlene.

Until her father’s passing, Charlene had no money to her name except a single share of Heineken stock—then worth 25.60 euros, or $32—that her father had given her. Now, as his only child and the sole heir to the Heineken fortune, she was inheriting about 100 million shares, equal to one-quarter of the company’s total stock outstanding. This 25% stake came with voting control, meaning that her single vote outweighed the votes of other investors on any board matter. Charlene had not thought much about her new responsibilities until that dreary morning at the cemetery. As she left her father’s grave, her husband put her on the spot. “Charlene, you have to make a decision within 10 days if you want to inherit the role that your father played.”

What Michel de Carvalho was suggesting was that Charlene, who had had no formal business education, guide the family company that Freddy, even after stepping down as CEO in 1989, had helped build to $9.3 billion in annual revenues. It took Charlene less than a week to respond in the affirmative to her husband’s proposition. With that, she uprooted her tidy life in London, began traveling the globe to study Heineken’s far-flung operations, and learned how to become an effective owner and the guardian of a dynasty.

Freddy HeinekenFreddy Heineken, Charlene’s father, could be flamboyant in business but kept a conservative household and a tight rein on his only child.

Perhaps you’ve never heard of Charlene de Carvalho-Heineken, and that has suited her just fine. At age 60, she is one of the world’s wealthiest women, worth some $11 billion. Before she sat down with Fortune in Amsterdam for this story, she had never spoken with the media. Particularly after her father was kidnapped 31 years ago, she worked hard to live below the radar—for many years content to be unknown even to employees of the company that bears her name.

She came to Fortune reluctantly, coaxed by her outgoing, energetic 70-year-old husband, an investment banker who holds the vice chairman position at Citigroup’s investment bank and chairs Citi Private Bank in the EMEA (Europe, Middle East, Africa) region. Before Freddy’s death, Michel de Carvalho had no need to rely on his spouse for anything except raising their five children and being a good banker’s wife. Today he calls Charlene “my boss.” Michel’s proposition the day of Freddy’s burial was, she says, “my wake-up call.”

And in fact, the transfer of control from Freddy to his daughter was a wake-up call for Heineken too. Charlene and Michel, who is a Heineken director, called on the board to replace the then-CEO with a more aggressive leader. That man, Jean-François van Boxmeer, is still Heineken’s chief. Reversing Freddy’s risk aversion, which hampered Heineken’s growth in the old man’s later years, van Boxmeer has spent more than $28 billion on 49 acquisitions, extending Heineken’s operations from 39 countries in 2002 to 71 today. Heineken still ranks as the world’s No. 3 brewer, behind Anheuser-Busch InBev and SABMiller, but sales have nearly tripled. With $24.9 billion in 2013 revenue, the company has an enviable portfolio of premium brands such as Amstel, Dos Equis, Sol, and the eponymous green-bottled lager that is the most widely distributed beer on earth.

These growing brands have propelled Heineken shares upward and helped the company, with a stock market capitalization around $43 billion, remain independent in a rapidly consolidating beer market. “The best defense is always a high share price,” says Michel. But the premium-brand portfolio, as well as Heineken’s strength in emerging markets like Nigeria (its second-largest profit producer, after Mexico) and Vietnam, has attracted unwanted suitors as well. In September, London-based SABMiller made an unsolicited bid for the company. Heineken issued a statement saying that it “consulted with its majority shareholder and concluded that SABMiller’s proposal is non-actionable.” That powerful shareholder is Charlene, whose story of discovering her power is a unique one. It’s also universal in some ways, offering lessons about building and protecting businesses for the long term.

To understand Heineken and the woman who controls it, it helps to know a bit about the people who came before her. In 1864, Charlene’s great-grandfather, Gerard Adriaan Heineken, bought a small brewery, De Hooiberg, in Amsterdam and began brewing beer with a special yeast. Gerard had one son, Henry, who chaired Heineken for 23 years and lost family control of the company in 1942 when he sold shares to pay for taxes and brewery expansion. His son, Alfred, known as Freddy, started working at the brewer, carrying sacks of barley, at 18. In 1954, Freddy borrowed money and bought enough Heineken stock to regain family control. He created Heineken Holding NV, which owns 50.005% of Heineken NV, the operating company.

CEO van Boxmeer notes that Heineken never suffered from siblings jockeying for control: This has been a family of mostly only children. “It’s not a very crowded legacy,” he says.

Growing up in the Dutch coastal town of Noordwijk, Charlene Heineken was a fairly typical only child: “painfully shy,” as she says, and protected, though not as spoiled as you might expect. “Mommy drove me to school every day. There were no chauffeurs,” she explains, adding, “I didn’t like the fact that my name was on every café.” Her father was a flamboyant salesman—he created Heineken’s green bottle and first TV advertising—but he preferred a simple life at home. Most evenings, Charlene and her parents would eat dinner on tray tables in the living room, in front of the TV. “Spaghetti and meatballs was all he wanted,” says Charlene about her father.

The Heinekens had vacation homes, including a ski lodge in St. Moritz, Switzerland, and they knew the Onassis and Agnelli families and Monaco’s Prince Rainier and Princess Grace, but they didn’t socialize a lot. That was fine with Charlene. “Society,” she says, “is a horrible word.”

Had Freddy’s only child been named Charles instead of Charlene, he probably would have been pushed into the family business. But the idea of taking a key role at Heineken was not mentioned to Charlene. “I don’t think he thought much beyond my having a happy, comfortable life,” she says. When she was 17, he wouldn’t let her leave home for college. “Daddy said, ‘You’re too young. You’re not going to live at a university on your own,’” she recalls. “I wasn’t allowed to go to Paris. That was ‘too racy.’ Some hippie friends of mine went to India with backpacks. That was not in the cards.”

Short of choices, she enrolled in a secretarial course in The Hague, and then went to the University of Leiden, where she studied law (“I hated it,” she says). At age 20 she left the Netherlands. She studied French in Geneva and photography in New York City. She worked for an ad agency in London. She interned at Heineken in Paris, where she followed the local boss around to get a taste for the family business. “I flitted from one thing to another, not making up my mind,” she says. She visited her father regularly in the Netherlands and St. Moritz, where he struggled to breathe at the high altitude, no doubt due to his four-pack-a-day cigarette habit. “In his dreams, I would have married a nice Dutch boy and lived next door,” she says.

Charlene met Michel de Carvalho on the ski slopes of St. Moritz. For an overprotected heiress who didn’t know what she wanted out of life, he was quite a catch. Born to a Brazilian diplomat father and British mother in England, he had been a teenage actor—he had a speaking role, as a shepherd boy named Farraj, with Peter O’Toole in the Oscar-winning epic Lawrence of Arabia (his stage name was Michel Ray). He went to Harvard University, and then he rebelled against his parents by putting off Harvard Business School to join the British ski team at the 1968 Olympic Games in Grenoble, France. He didn’t win a medal. But he loved competing, and he went back to the Olympics as a member of Britain’s luge team in 1972 and 1976.

Lawrence Of ArabiaPeter O’Toole (left) with Michel de Carvalho during location filming on ‘Lawrence of Arabia’, 1962.Courtesy of Silver Screen Collection—Getty Images

Wooing Charlene Heineken from the grip of her father turned out to be the ultimate sport for de Carvalho. “It was an unbreakable bond,” says Michel. He recalls Freddy sitting with him at a three-hour dinner in Amsterdam and grilling him on his past romances, his bank account, even his eyesight. “The nicest thing Charlene’s father ever said about me was, ‘He’s not interested in Charlene for her money.’” Michel and Charlene married in London in the fall of 1983. Two days after they returned from their honeymoon in St. Croix and Virgin Gorda, something happened that would alter Charlene’s life dramatically.

Michel de Carvalho, Charlene de Carvalho, Heineken headquartersMichel de Carvalho with Charlene at Heineken headquartersPhoto By: Sander Stoepker—Fotograaf

One moment Freddy Heineken was walking out of his office at Heineken headquarters in central Amsterdam, and the next, he, along with his chauffeur, was lying in the back of a minivan, with kidnappers in charge. For the next 21 days Charlene and her mother holed up with a squad of police and hostage negotiators at the seaside Heineken home in Noordwijk, 50 kilometers southwest of Amsterdam. “They asked for $20 million in unmarked bills. Of course we marked the bills, but you couldn’t see it,” says Charlene. “We paid the $20 million and didn’t get Daddy back.” Finally, chasing a lead, the police stormed a warehouse north of Amsterdam one night. Behind a fake wall they found Freddy and his chauffeur chained to a concrete wall. They were hungry and exhausted but basically fine. Freddy later joked that he was tortured: “They made me drink Carlsberg.”

After that ordeal Charlene was glad to leave Amsterdam and settle in London with her new husband, who was working for Credit Suisse. While Michel flew to visit clients around the globe, Charlene stayed home, having babies in efficient succession. After Alexander, their first child, arrived in 1984, Charlene had three more, including twin girls, within four years. At 37, she had five kids under the age of 7. She was happy and stressed. “I used to sit and sort the Legos by color, almost obsessively,” she says. “I needed to have one part of my life organized.”

While women in the Netherlands generally attach their maiden name to their married name, Charlene, as a London resident, had dropped “Heineken” from her surname. “I’ve always thought double-barreled names were nonsense,” she says, so she liked being known as Mrs. de Carvalho. “My friends knew, but they were not impressed” by her lineage, she says. “I lived off his salary and his bonus in his house,” she says, referring to Michel. “I lived the life of a wife of a man who worked for a bank.”


heineken, de Carvalho familyThe de Carvalho family (from left): Alexander, Michel, Charlene, Louisa, Charles, Sophie, and IsabelPhoto By: Sander Stoepker—Fotograaf

For anyone who oversees a family business, passing it on to the next generation is the ultimate challenge of leadership. “If we get that wrong, we’ve wasted our energy on all that we’ve built,” says Michel de Carvalho, the investment banker husband of Charlene Heineken.

Heineken has a stock market value of $44 billion, and Charlene aims to pass on her 25% ownership stake and control of the voting shares more prudently than her father, Freddy Heineken, did to her. So she and Michel have been diligently studying the best practices of passing on a family business. No matter the size of a dynasty, certain basic rules apply.


Other billionaire owners of family businesses have advised the de Carvalhos, regardless of how they divvy up the wealth, to select one of their five children to take control of the company. “But Charlene and I are not yet convinced that we could not have an odd number, perhaps three,” admits Michel, noting that ownership may be a lonely job for one heir. “Had Charlene not been married to someone who has a strong interest in the business, it would have been a terrible burden.”


Don’t trap them,” says Byron Trott, a former Goldman Sachs banker whose merchant bank, BDT & Co., invests in and advises closely held companies. “Allow them to find their passion.” Trott admires the way the de Carvalhos are getting their five children to define their interests, whether philanthropic, arts-related, or corporate. Meanwhile, they’re preparing eldest son Alexander, who works in private equity, to inherit control of Heineken. “He’s on the board. He’s working in the financial industry,” notes Trott. “He understands the rigor of opting in.”


Freddy Heineken stocked his board with yes men, which weakened the company before -Charlene inherited control in 2002. Charlene and Michel’s advice to Alexander or whoever among their children eventually takes control: “Surround yourself with the best possible people who are not yes men and sycophants. You want people who express doubt.”


Family control of a business protects management from “the short-term whims of Wall Street,” enabling it to focus on long-term growth, says Trott. “These companies tend to outperform the market over long periods of time.” Trott advises the de Carvalhos: “Keep doing what you’re doing, because you’re doing it very well.” —P.S.

Charlene had little desire to engage in the family business, but that hardly mattered when, in 1988, her father invited her to join the board of Heineken’s holding company. That’s because Freddy was an authoritarian boss who selected board members who would agree with him. “He had to be boss,” says Charlene. “Delegating was not his thing.” This became more of a problem as Freddy aged and became cautious and more tightfisted, in contrast to his adventurous youth. “I don’t think it was the kidnapping,” Charlene says. “I think he was just feeling slightly less king of the mountain.”

Meanwhile, the beer industry was brimming with big deals—SAB was expanding aggressively beyond its native South Africa, Belgium-based Interbrew (now part of AB InBev) bought Labatt for $2 billion—after Freddy Heineken wasn’t willing to pay up for the Canadian brand. “Labatt was a turning point in the industry,” says Charlene. “In retrospect, maybe we should have bought it.”

When Freddy died on Jan. 3, 2002, Heineken profit growth had slowed, and the stock was declining. Michel was worried, and his proposition to Charlene that day in the cemetery was not just about her stepping up; he knew he would have to as well.

He had by this time moved to Citigroup, so he wrote to Sandy Weill, then Citi’s CEO, and said he would have to resign because he now needed to spend one or two days each week in the Netherlands to help his wife oversee Heineken. “Sandy wrote back and said, ‘What’s the difference if you’re in Amsterdam or London, as long as you’re available on your BlackBerry or phone?’” Free to roam, he and Charlene began visiting Heineken breweries and offices around the world, asking about problems and assessing talent.

“Many people assumed we would sell the business or screw it up,” says Michel. As the couple met with managers and investors around the world—initially, he more than she, since they had young children at home—they spent many hours at night comparing notes. “I’m finding it fascinating,” she recalls thinking.

Vowing not to meddle with day-to-day operations, they reserved the right to shake things up in four areas: the company’s image, its balance sheet, acquisitions, and the selection of board members and key executives. And they made clear that they were not fooling around. “You have seen the sweet and docile side of Charlene. May I remind you that she is half her father,” Michel wrote to Heineken’s chairman. “That is probably a side that you should leave dormant.”

And so, when they saw Heineken missing opportunities in the global market, Charlene and Michel urged the board to replace CEO Thony Ruys. Then they helped evaluate internal candidates and settled on van Boxmeer, a scrappy operator who had joined Heineken in 1984, worked in several emerging markets, and led Heineken’s business in the Congo.

The 53-year-old van Boxmeer has stretched the balance sheet in ways that Freddy never would have. He led the acquisition of Edinburgh-based Scottish & Newcastle for $15.5 billion, in partnership with Carlsberg—a deal that fortified Heineken in the European beer market and gave it a major footprint in the fast-growing cider category. In 2010, Heineken bought Femsa Cerveza, Mexico’s second-largest brewer. That $7.6 billion purchase added 20,000 employees to Heineken, which now has 81,000 employees worldwide.

“We’ve been blessed to have a majority shareholder who empowers us,” says van Boxmeer. Truth be told, if the de Carvalhos had their way, Heineken would move even faster. “I’m always frustrated,” says Michel. “One of the things that drives me is the thought that one guy is constantly looking down and wondering whether we’re going to fuck it up.”

When I ask Charlene de Carvalho-Heineken what her greatest worry is, she takes a few seconds to think and then replies, “Sometimes success breeds complacency.” She and Michel were surprised by SABMiller’s takeover approach in September because SAB’s top brass had informally proposed combining many times, and “we had left a fairly clear message that we have no interest,” says Michel.

They weren’t frightened by SAB’s latest overture since “the lady who throws the switch,” as Michel calls his wife, owns over 50% of Heineken’s voting stock. But they view the bid as fair warning to be on top of their game. “There’s a silver lining in the cloud,” says Michel, explaining that the takeover bid enables Heineken’s CEO to “tell 81,000 employees, ‘You all have to work harder to keep the stock up.’ This gives Jean-François a free hand to be a tougher CEO.”

Michel says he worries about succession. Van Boxmeer will complete the last year of his third four-year contract in 2017, and he and Charlene would be pleased if he renews. “Jean-François is one of the world’s great CEOs,” says Michel. But they’re concerned that there is no clear successor. Will the next CEO come from inside the company? “Ideally, yes,” Charlene says. Michel adds: “I would be very disappointed if three or four executives wouldn’t consider themselves to be candidates, but in Holland and in London, unlike the U.S., putting yourself even slightly above the parapet is a recipe for disaster.”

Learning how to preserve the dynasty has become the de Carvalhos’ most important mission. Charlene and Michel recently hired a British consultant on inherited wealth, Martin Jenkins, to talk with the family about, as Michel said in a letter to the five children in June, “your ambitions, desires, questions, maybe even fears of inheriting a legacy.” Jenkins meets with the family as a group and with the individual children, now 23 to 29, whom their parents call the “G-5.”

And in September, on the same day that Charlene rejected SABMiller’s bid, she and Michel were in Chicago at a conference hosted by Byron Trott, a former Goldman Sachs executive who has his own firm, BDT & Co., to advise and invest for billionaire owners of closely held companies. At the conference, the de Carvalhos chatted with people who share the same burdens of wealth that they do—people named Walton and Smucker and Koch. “We all have exactly the same problem,” says Michel. “But every family relationship is a little different,” adds Charlene.

What is the best advice they’ve received about passing control of the business to the next generation? “Think hard and pick one,” says Michel. “That’s the message we’ve been hearing.” Though they may opt to hand control to more than two of their children (see box).

The de Carvalhos have not yet decided which of their five children will control Heineken after they’re gone or incapable, but one heir surely in this mix is eldest son Alexander. He’s an associate at Lion Capital, a London-based private equity and buyout firm, and he joined the Heineken holding company board last year.

The 29-year-old Alexander has been interested in the family business since he was 8 years old. “I was checking share prices and looking at board materials and made countless notes,” he says. He was 17 when his grandfather Freddy, whom he adored, passed on. Every day he wears Freddy’s watch—“a very scratched, very old simple Rolex”—and he goes out of his way to hail a Heineken-branded taxi to ride to work. “Heineken is the first thing I think about when I get up in the morning and the last thing I think about when I go to bed,” he says.

His parents are pleased that Alexander wants the job of guarding and guiding the family business. But they’re not counting out younger son Charles, 23, who is working for an Internet retailer in Vietnam, or oldest daughter Louisa, 28, who has worked in film production and is now with a spirits company in London. Twins Isabel and Sophie are studying art and music, respectively, and may play roles in Heineken’s work on philanthropy and social responsibility.

Charlene guides her children this way: “If you have a passion and the ability to pursue it, follow that,” she says. “You’ll probably be better off following your passion than doing what you’re supposed to do.” Her advice is bittersweet, coming from the woman who discovered her passion for business later than she would have preferred. “It was probably a mistake not to do some business education,” she says. “I think it may have given me the respect that I have to fight for.”

Indeed, respect cannot be bought, even for $11 billion. It is hard earned.

This story is from the December 22, 2014 issue of Fortune.

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