Group 4 Falck

Denmark's Group 4 Falck and Britain's Securicor both security companies merged to form G4S in 2004.

Industry Areas

Mostly security and security related services. Security: guarding, alarm and cash services Safety: ambulance, rescue (including auto assistance), fire services, patient transport, psychological crisis therapy, personal care alarms and risk management. ‘Global solutions’: (public-private partnerships) includes prison and court services, meter-reading services, immigration services, education, prison transport and other outsourced services.^[1]

Market share/importance

Group 4 Falck A/S is the world’s second largest security services provider.^[2] The company has more than 230,000 employees in more than 85 countries, making it the world’s largest employer in the security sector.^[3] It has, since 2002, with its acquisition of the Wackenhut Corporation, increased its profit margin by 40%^[4], almost doubled its number of employees and increased its market share dramatically, however Securitas (www.securitas.com.) still claims to be the largest security company in the world.

History

Group 4 Falck is better known in the UK as Group 4, a name which has come to be associated with incompetence and failure.^[5] Group 4 Falck was created in 2000 by the merger of Group 4 Securitas (International) B.V. and Falck A/S. The companies were both formed in the beginning of last century in Denmark, when Philip Sørensen and Marius Hogrefe founded the guarding company ‘København Fredriksberg Nattevagt’(1901), and Sophus Falck established ‘Redningskorpet for København og Fredriksberg A/S’ (1906).

Redningskorpet for København og Fredriksberg A/S, which later changed its name to Falck, started off providing guarding, ambulance and fire engine services. In 1988 the Falck family sold the company to Baltica, a Danish insurance company, that went on to sell off 55% of Falck to a number of other major insurance companies. During the 90s Falck expanded in Europe by acquiring several companies (Patena Security in Sweden, Falken in Norway, SIMIS in Germany, Sezam Sp. z o.o. of Poland, AS ESS, a security operator with companies in all Baltic states, and Nederlandse Veiligheidsdienst (NVD), the largest security operator in the Netherlands).

In 1950 the Sørensen family established itself in the UK. At this time, all its companies were managed under the name ‘Securitas International’. In 1963, Store Detectives Ltd and Securitas Alarms Ltd, were set up by the family in the UK. Jørgen Philip Sørensen was appointed managing director of the UK part of the group in 1965. The UK part of the business was organised under the name Group 4 from 1968 onwards.

In 1981 the activities of the Sørensen family were split up into Securitas AB (the Swedish activities) and the Group 4 group (the rest of the European activities). Group 4 moved on to expand to several countries all over the world (India, United Arab Emirates, Ukraine, Turkey, etc). In 1990 the group acquired American Magnetics Corporation which specialises in access control systems. This helped Group 4 Falck to win the highly prestigious contract to handle security at the Pentagon.

Group 4 has been one of the benefactors of the UK privatisation policy during the 90s. In 1991, it got the first contract to manage the UK’s first privatised prison, Wolds in Humberside. British Gas also started a joint venture with Group 4 to provide meter reading to more than 19 million customers (they work together under the name Accuread).

After the merger of Group 4 and Falck in 2000, the expansion continued with several acquisitions (ADS (Germany), SOS (Austria), SPAC (Finland), BOS (Czech Republic), Unikey (Norway) and Banktech (Hungary)). The year 2001 was a good one for Group 4 Falck with an increased turnover and a 20% increase in profits. This was thanks to the growth in the markets in Indonesia, Kazakhstan and the republics in Central Asia (especially in the oil and gas sector).^[6] It also acquired the security company Euroguard (France). In 2002 Group 4 acquired the Wackenhut Corporation (US) and increased its profits further still.

Its acquisition of the Wackenhut Corporation adds a new and disturbing section to Group4 Falck’s corporate history. Formed in 1954 by former FBI agent George Wackenhut, its first major coup was the collection of two million files of US citizens implicated in the McCarthyite witch hunts of the 1950s.^[7] In the 1970s the company was implicated in supplying chemicals for weapons to Iraq^[8] Since then it has diversified into incarceration and other areas of security. The resale of part of the Wackenhut Corp. - Wackenhut Corrections - appears to signal a move out of incarceration and back to the company's ‘core’ security and safety business.^[9] Given the company's record in private prisons, campaigners will certainly hope this is part of a wider trend.

Resources

• Group 4 Falck: Products/Projects
• Group 4 Falck: Who, Where, How Much?
• Group 4 Falck: Influence / Lobbying
• Group 4 Falck: Corporate Crimes
• Group 4 Falck: Links, contacts & resources

References

1. ^Group 4 Falck, 3rd Quarter Report 2002, www.groupfalck.com/db/filesq3_2002_uk.pdf , viewed 10/2/02
2. ^ Group 4 Falck in Brief, www.group4falck.com/object.php?obj=3a000c , viewed 2/7/03.
3. ^ Ibid.
4. ^ Ibid.
5. ^ Mostly taken from www.group4falck.com/object.php?obj=obj3b000c , viewed 10/10/01; and www.wackenhut.com , viewed 10/02/03.
6. ^ Norton-Taylor, R. (1999) Group 4 wins Pentagon contract, 29 September 1999, viewed 26/11/01
7. ^ Marshall, C. (1994) The Last Circle, www.lycaeum.org/books/books/last_circle/4.htm , viewed 12/3/03; www.geocities.com/Area51/Vault/6291/govment5.htm viewed 18/02/03
8. ^ Rintoul, S. (2002) Detention company’s murky origins, The Australian, 28/12/02, www.theaustralian.news.com.au/common/story_page/0,5744,5756510%255E23592,00.html , viewed 18/3/03.
9. ^ PR Newswire (2003) WCC Announces Agreement to Buy Out Controlling Interest Held by Group 4 Falck, http://biz.yahoo.com/prnews/030501/flth013_1.html , viewed 2/7/03.