John Elkann, chairman of Fiat Chrysler Automobiles NV and scion of the Agnelli family that founded the Italian side of the car maker, is holding on to a key bastion of support in the wake of busted merger talks with Renault SA: his own relatives.
The Agnelli-Elkann clan—numbering more than 100 extended family members springing from Fiat’s founder, Mr. Elkann’s great-great-grandfather—is so far sticking by him, according to family members and people close to the group.
Mr. Elkann, who took over as head of the family 15 years ago, told the gathering that Fiat Chrysler remains on the lookout for a possible partner, but that the company is strong enough to survive on its own, according to people present at the meeting. About 50 family members attended the meeting, which was scheduled before Fiat Chrysler proposed to merge with Renault .
Mr. Elkann, 43 years old, negotiated the proposed deal with France’s Renault, envisioned as a $40 billion merger of equals that would have created the world’s third-largest car maker by volume. A consummation would have consecrated his emergence from the long shadow of former Fiat Chrysler Chief Executive Sergio Marchionne,
who died last July. It would have also forwarded a long-held aim of the family: to diversify its wealth beyond the auto industry.
“
Renault was Elkann’s deal, and he’ll get the credit or the blame, depending on how this ultimately turns out,” said a person close to the family.
“
Fiat Chrysler has never been stronger than today…and as Exor we’re always looking for ways to improve and build our companies,” Mr. Elkann said.
Neither Fiat Chrysler nor Renault have ruled out a resumption of talks. The French government, which owns 15% of Renault, said earlier this month it wasn’t yet ready to support a tie-up without explicit backing from Japan’s
Nissan Motor Co., Renault’s longtime partner. Mr. Elkann, instead of waiting around, pulled the deal.
Renault owns 43% of Nissan, while Nissan owns 15% of Renault. The cross ownership means both Renault and Nissan must be on board in any deal. The two companies recently resolved a
key corporate-governance dispute, a move that could help smooth over their fraught relationship, according to people familiar with their talks.
Two family members who attended the meeting and other people familiar with some influential
family members said Mr. Elkann continues to enjoy broad-based support among the family and a clear mandate to continue to seek a tie-up.
Giovanni Agnelli founded Fiat at the end of the 19th century. Mr. Elkann’s grandfather, Gianni Agnelli, rode the car maker through Italy’s postwar boom, cementing its status as a national icon—and turning himself into Italy’s most famous industrialist, with a reputation for a playboy lifestyle.
When he died in 2003, his brother Umberto took over. Umberto Agnelli died the following year, catapulting Mr. Elkann, 28 at the time, into the role of leading the family’s businesses.
Mr. Elkann consolidated his power inside the family while avoiding the spotlight. Immediately after taking over, he tapped Mr. Marchionne, who ran another family business, to be Fiat CEO, and made him the company’s public face.
Exor has paid the family more than €400 million in regular annual dividends since 2009, something that has helped Mr. Elkann achieve consensus among his relatives. Exor’s share price has risen almost 10 times in that period.
As part of the failed merger plan, Fiat Chrysler would have paid its shareholders a €2.5 billion special dividend to bring its market value in line with Renault’s. Exor would have gotten €725 million of that.
Mr. Elkann hasn’t always held the unambiguous backing of all his relatives, according to people close to the family. Andrea Agnelli, the son of Umberto Agnelli, in the past has been at odds with his cousin Mr. Elkann and years ago had aspired to be head of the family, according to people close to the family.
Unity in the family is pretty much total,” Mr. Agnelli said. “John and I meet about once every three weeks to share ideas.”
Mr. Agnelli, chairman of Exor-controlled Juventus, Italy’s most illustrious soccer team, noted that his generation had been skipped over at the last leadership change that brought Mr. Elkann to power. His half-brother,
Giovanni Alberto, had been Gianni Agnelli’s preferred successor, but Giovanni Alberto died young.
The family business has at times been a source of discord. In 2007, Mr. Elkann’s mother—Gianni’s daughter—unsuccessfully sued three close family advisers alleging they hid family assets. The move was seen as a personal affront to Mr. Elkann as head of the clan.
Even though the Renault deal hasn’t come together,
its size and complexity has burnished Mr. Elkann’s standing in the family, according to one family member. The Renault approach has come further along than previous deals, including Mr. Marchionne’s on-again, off-again courtship a few years back of General Motors Co.
“
John’s reputation has been greatly enhanced within the family by this deal because of the size and potential impact,” said another family member present at the meeting. “If he pulls this off, he will be hailed as a hero.”
sport.ilmattino.it
www.wsj.com