personal finance

Jeff Bezos to keep control of Amazon stake after divorce


Jeff Bezos will retain three-quarters of his stake in Amazon when he divorces from his wife MacKenzie, who will hold stock worth more than $35bn in what has been billed as the biggest settlement of its kind.

Ms Bezos said on Thursday she would hand over all her Amazon voting rights to Mr Bezos, allowing him to retain his current level of control in the company he founded almost 25 years ago and which is now worth almost $900bn.

The details of the division of their joint $143bn Amazon stake resolve questions of both governance and ownership that have hung over the company since the couple announced they were divorcing in January.

The settlement also cements Mr Bezos’s hold on the rest of his business empire. Ms Bezos said in a statement posted to Twitter on Thursday that she would hand over all her interests in The Washington Post newspaper and Blue Origin, Mr Bezos’s rocket company.

“What they have done is structure something that allows him to continue to do what he was doing — effectively operating and managing — in a successful way because it benefits both of them,” said Jennifer Payseno, partner at McKinley Irvin, a Seattle family law firm.

Mr Bezos is likely to remain the world’s richest person: his 12 per cent of Amazon’s shares after the divorce is finalised are worth around $107bn at the current share price. According to Forbes magazine, that would leave his wealth, the bulk of which derives from the Amazon stake, above that of Microsoft co-founder Bill Gates, whose net worth is estimated at $96.5bn.

Ms Bezos’s 4 per cent stake will make her the world’s third-richest woman in her own right, after Françoise Bettencourt Meyers, the L’Oreal heiress, and Alice Walton, the daughter of Walmart founder Sam Walton, according to Forbes estimates of their net worth.

Her holding will make her Amazon’s fourth-largest shareholder, behind Mr Bezos, Vanguard and BlackRock.

The transfer of such a large stake ranks as one of the biggest equity transactions of all time.

It eclipses the largest ever initial public offering, the 2014 flotation of Chinese ecommerce giant Alibaba, which brought in $25bn in proceeds. The biggest follow-on share offering by a public company was the $70bn sold by Petrobras, the Brazilian oil company; AIG, the insurer, raised $20.7bn in 2012.

The Bezoses filed a petition for divorce on Thursday, according to an Amazon filing with the US Securities and Exchange Commission, and expect the settlement to be confirmed by decree in about 90 days.

“Grateful to have finished the process of dissolving my marriage with Jeff with support from each other and everyone who reached out to us in kindness, and looking forward to next phase as co-parents and friends,” Ms Bezos said in her statement on Twitter. “Excited about my own plans. Grateful for the past as I look forward to what comes next.”

In his own statement, Mr Bezos thanked his soon-to-be former wife and said he was “grateful for her support and for her kindness in this process”.

“She has been an extraordinary partner, ally and mother. She is resourceful and brilliant and loving and as our futures unroll, I know I’ll always be learning from her,” he said.

The Twitter statements and Amazon’s filing are probably the only information about the Bezoses’ separation that will become public, according to lawyers.

“Most successful people, celebrities, basketball players and just plain rich people sign a confidential stipulated judgment. The court filing will simply reference that agreement,” said David Glass, a Los Angeles divorce attorney and author of Moving On: Redesigning Your Emotional, Financial and Social Life After Divorce.

That means how they divide the rest of their assets — such as real estate, private investment accounts and charitable trusts — as well as details of their arrangements for custody and child support of their four children may never be known.

They own homes in suburban Seattle, New York, Washington and Beverly Hills, as well as 400,000 acres of land in west Texas. Mr Bezos has made venture capital investments in companies including Uber, Airbnb and Twitter. They also jointly launched a $2bn charitable fund last year focused on early childhood education and homeless families, and both serve as managers and directors of Mr Bezos’s parents’ foundation.

Under local community property law in Washington state, where their family home and Amazon’s headquarters are located, income and property earned by each spouse during a marriage are treated as belonging to both spouses, so they would each have claim to them in a divorce.

“Typically they would go down the balance sheet and shift each asset to the wife’s or husband’s column, and then when you add at bottom of the page, the totals have to be roughly equal,” Mr Glass said. But courts generally approve private agreements to divide property however the divorcing couple chooses, he said, as long as both parties agree and are not doing anything illegal.

“My general advice to clients is to try and split things up one way or another. You don’t want to have too many entanglements with your ex-spouse, even if you’re on good terms.”

The Bezos divorce has captivated attention since the couple’s announcement in January was quickly followed by allegations in the National Enquirer that Mr Bezos was having an affair.

Mr Bezos launched an investigation into how the tabloid obtained leaked text messages between him and Lauren Sanchez, the woman he has been dating. In February he accused the tabloid’s publisher, American Media Inc, of extortion and blackmail, saying it had threatened to publish intimate photos and text messages unless he called off the investigation.

Last weekend Mr Bezos’s head of security accused Saudi Arabia of accessing the Amazon chief’s phone and obtaining private information.





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