November 14, 2019
CARLO DE BENEDETTI likes great dramas. When he resigned after just three months as Fiat's chief executive in 1976, rumors surfaced that he was trying to make a proposal to the then-ill-car maker with the help of Swiss financiers. De Benedetti denied having such projects. But he seemed to enjoy all the attention.
De Benedetti, who turned 85 on November 14, is at the center of the Italian business stage with another unorthodox offer. Last month, it offered € 38m ($ 42m) to buy a 29.9% stake in GEDI Gruppo Editoriale, publisher of newspapers such as La Stampa and La Repubblica, as part of a business relaunch plan currently underway. run by his children, Marco. and Rodolfo. His children "lack the skills and passion to be editors," he lamented in an interview with Corriere della Sera, a rival daily. The GEDI was a ship without a captain, at the mercy of high waves, according to the patriarch. On October 28, he resigned as honorary president of GEDI. (Exor, a holding company whose chairman sits on The Economist's parent company, owns a 6% stake in GEDI.)
De Benedetti's return can be particularly dramatic, but other Italian Methuselahs are also featured. Stefano Pessina, the 78-year-old billionaire who is the head and largest shareholder of the Walgreens Boots Alliance, is exploring a deal to deprive the struggling American drugstore chain. On November 11, KKR, an American private equity giant that joined Pessina in 2007 to buy Alliance Boots, made a formal offer to Walgreens. The $ 70 billion purchase would be the largest in history. Days earlier, data from Consob, an Italian securities regulator, revealed that Leonardo Del Vecchio, founder of 84-year-old eyewear maker (including Ray-Ban and Oakley glasses), has just increased its stake to nearly 10%. at Mediobanca, an influential investment bank. Del Vecchio is expected to further increase its participation. Italy's second richest man is challenging Mediobanca to build its investment banking business and to rely less on revenue from its stake in Generali, Italy's largest insurer (of which Del Vecchio also owns a stake).
Another 84-year-old Luciano Benetton is again getting involved in the business of making colorful clothes that first named his family. A revival of the fashion business can help divert attention from the clan's infrastructure business. This was hampered by the tragic collapse last year of a bridge in Genoa run by Autostrade, a toll operator owned by a holding company controlled by Benettons.
Elderly patriarchs who are reluctant to bow, or plan the day when nature will eventually force them, are a hallmark of Italian capitalism. Giorgio Armani runs his fashion empire at age 85. Silvio Berlusconi, 83-year-old former prime minister of Italy, remains the power behind the throne in Mediaset, Italy's largest commercial broadcaster (run by his son, Pier Silvio). When Bernardo Caprotti died three years ago at age 90, he was still running Esselunga, a supermarket chain he founded.
Over the past ten years, corporate leadership has been rejuvenated, notes Franceso Giavazzi at Bocconi University in Milan. But, like Harvard Business School's Raffaella Sadun, it may be because the founders put younger family members in charge as a way to keep track. "It's not clear relationships are the best people for the job," she says. Many talented managers are reluctant to join companies where their career prospects would be subordinated to reckless descendants. Mittelstand's midsize businesses in Germany can teach Italian companies one or two things about how to deal with succession, Sadun says.
The younger De Benedettis were surprised by the paternal raid. Despite a sharp decline in Q3 profits, they insist the group needs no restructuring. At least the paternal offer, however painful, can be lucrative. In 2012, De Benedetti gave Rodolfo, Marco and their third child, Edoardo, their stake in CIR, a holding company that owns 44% of GEDI. Each would pocket millions if they bought it back.
This article appeared in the Business section of the print edition, titled "Octogenarians are shaking up Italian business"
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