EXOR CEO Embraces Grandfather’s Dealmaking Style to Revamp Agnelli Empire

By Dan Liefgreen, and | August 17, 2015

As a boy, John Elkann watched his grandfather Gianni Agnelli build Italy’s biggest industrial fortune, but as an adult he has never adopted Agnelli’s swashbuckling style.

Lately, though, Elkann has embraced at least one of his grandfather’s trademarks: dealmaking.

EXOR SpA, the Agnelli family investment company led by the 39-year-old Elkann, on Wednesday emerged as the largest investor in The Economist magazine. And on Aug. 3, EXOR won a takeover battle to buy reinsurer PartnerRe Ltd. for about $6.9 billion.

“These deals show how John Elkann has matured, making him one of the most interesting dealmakers around,” said Enrico Valdani, a professor of economics and business management at Milan’s Bocconi University.

Elkann is aiming to streamline the family’s holdings. In May, EXOR sold real-estate company Cushman & Wakefield Inc. for about $2 billion. And last year Elkann joined with Fiat SpA Chief Executive Officer Sergio Marchionne to engineer a takeover of Chrysler and list the combined company in New York. “We have worked very hard in the last few years to simplify what EXOR is,” Elkann said in May. The goal, he said, is “owning fewer companies but of bigger size.”

As Elkann was working on the PartnerRe deal he was negotiating an increase in EXOR’s stake in the Economist, half- owned by Pearson Plc. Other shareholders included European dynasties such as the Cadburys, Rothschilds and Schroders.

On July 25 Elkann attended the wedding of his wife’s step-sister, Beatrice Borromeo, to Pierre Casiraghi, one of the heirs to the throne of Monaco. As the guests gathered, Elkann oversaw preparation of a statement emphasizing he didn’t intend to upset the status quo at the magazine by aiming for full control.


In the end, EXOR boosted its stake in The Economist Group to 43.4 percent from 4.7 percent, while the Rothschilds increased their share to 26 percent from 21 percent.

EXOR controls businesses ranging from Fiat Chrysler to Italian soccer champion Juventus. The Economist will add to a portfolio of media holdings that include Turin daily La Stampa, which EXOR controls through Fiat. The carmaker is also the lead investor in a media company that publishes Italy’s biggest newspaper, Corriere della Sera.

Agnelli, a jet-setter still known to Italians as “L’Avvocato,” or “the attorney,” died in 2003. Dubbed one of the world’s best-dressed men by Esquire Magazine, Agnelli was treated like royalty by the Italian press, frequently spotted consorting with luminaries such as Jacqueline Kennedy Onassis and Henry Kissinger.

Agnelli took over Fiat from his own grandfather, Giovanni Agnelli, and after World War II helped rebuild Italy’s largest manufacturer. Over the years, he added production of railroad cars, airplane components, tractors and trucks. In 1966, he began a 30-year stint as Fiat chairman, buying up rivals including Ferrari, Maserati and Alfa Romeo. Today, almost four-fifths of EXOR revenue and half of its profit comes from auto manufacturing.

Elkann, Agnelli’s eldest grandchild, was born in New York, the son of Margherita Agnelli and Alain Elkann, a French-Italian writer. The avid sailor and soccer player is tall and gangly with tousled dark hair and a boyish smile. In public, Elkann comes off as shy, and when he speaks his delivery is slow and deliberate, as if he’s weighing each word.

Elkann has overseen the family fortune since 2004, when Agnelli’s brother Umberto died. EXOR was formed in 2009 with the merger of a pair of holding companies, and its shares have risen more than seven-fold since then. The family’s 51 percent stake in EXOR is valued at 5.6 billion euros ($6.2 billion).

Leaving Italy?

Despite Elkann’s stewardship of the business, union leaders and even some business executives have criticized him for abandoning the country where the family made its fortune.

“The Agnellis are leaving Italy,” Diego Della Valle, the founder of leather-goods maker Tod’s SpA, said on Italian television after Fiat purchased Chrysler. “And what is left of the family has an attitude I don’t like.”

Elkann insists that Fiat has no desire to quit Italy, and that the company has added thousands of Italian jobs due to its global expansion. As Elkann works on EXOR deals, he’s also supporting Marchionne’s campaign to merge Fiat Chrysler — where he serves as chairman — with another carmaker to forge a new No. 1 in the auto industry.

Though their overtures have been rejected by their preferred partner, General Motors, the effort is emblematic of a new, broader vision for Agnelli’s heirs, according to Giuseppe Berta, the former head of Fiat’s archives.

“Gianni’s main goal was to preserve the family’s industrial heritage as an Italian manufacturer,” Berta said. With his global dealmaking push, “Elkann wants to make his heritage grow.”

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