The matchmaker who discovered reinforced concrete

Spring 1932. Inside an apartment at number 5 Avenue Victor Emmanuel III, in the 8th arrondissement of Paris, a gunshot is heard. When the police arrive, they discover the lifeless body of Ivar Kreuger, one of the most prominent business magnates of the time in both Europe and the United States. Everything points to suicide.

Kreuger's journey had begun many years earlier, when this Swedish engineer, the son of a match manufacturer, discovered reinforced concrete. Working as an engineer in the United States, Mexico, and South Africa, he saw this new construction technique and thought about introducing it to his country (reinforcing concrete buildings with steel bars had been invented decades earlier, but its widespread adoption took time). With this idea in hand, he returned to Sweden, and in 1908 founded the construction company Kreuger & Toll with Paul Toll. The company's main appeal was the ability to shorten construction times and, consequently, offer very precise completion dates. The proposal was a success, and they secured truly iconic commissions, such as the construction of the Stockholm Olympic Stadium, which would host the 1912 Games.

The high profitability of the business allowed Kreuger to create a holding company to invest in other companies outside the construction sector. This is how, in the 1920s, he acquired holdings in banks, mining companies, railways, timber, paper, film distribution, real estate, and more. He even acquired a controlling stake in Ericsson, the country's leading telephone manufacturer, in 1925. He came to dominate 50% of the iron and pulp markets. Most of his investments were made through share swaps, rather than outright cash outlays, with the intention of accelerating growth.

One of the businesses he created during this diversification process was Svenska Tändsticks AB (STAB), which continued his family's traditional business of manufacturing matches. With a highly aggressive acquisition policy, by 1930 he had managed to amass between 50% and 70% of the world's match production (years later the company would evolve into tobacco, and in 2022 it was acquired by Philip Morris). It appears he was the inventor of Class B shares, without voting rights, to finance himself without losing control of his companies.

At the height of his business success, Kreuger's fame was immense. So much so that the President of the United States (he was a personal friend of Herbert Hoover) and many high-level European politicians sought his advice. He was also someone who moved with ease among the stars of Hollywood's golden age (the Swedish actress Greta Garbo, for example, was a close friend of his). One of the strategies he employed to penetrate the markets of different countries was the purchase of government debt; he even took out loans with France, Germany, Hungary, Turkey, Greece, and a good number of other nations around the world.

By 1931, Kreuger's empire comprised over 200 companies and accounted for 60% of the Swedish stock market's capitalization. He had built a vast empire, but the flaws in his model began to show after the 1929 stock market crash. The first alarm was raised by ITT, the telephone company that had acquired Ericsson from Kreuger. Upon reviewing the business's financial situation, they felt cheated by the Swedish magnate and demanded a refund of the sale price. The creative accounting he systematically employed revealed that the entire structure was a house of cards that soon collapsed. Initially, the lack of liquidity to meet the numerous debts was compensated by the Swedish government and the country's central bank, but in exchange for shedding light on the opaque accounting practices of his corporate network. His image, until recently mythologized, shattered in record time. The renowned economist John Kenneth Galbraith described Kreuger as the Leonardo da Vinci of fraudulent financial practices.

And in that critical situation, we arrive at March 12, 1932, the moment when Kreuger could no longer cope with his descent into hell and ended it all. Or perhaps not, because in the 1960s, a series of declassified books and documents put forward the theory that Kreuger had been murdered.