Italian deal creates pounds 16bn giant
Monday 04 September 1995
The twin giants of Italian finance and industry have joined forces in a stunning deal this weekend, to create the country's second-largest industrial conglomerate out of the ruins of two high-profile loss-making companies.
The typically audacious merger swung the spotlight back onto the deal- making powers of the two men who reign over Italian business: Gianni Agnelli, veteran chairman of the Fiat empire, and Enrico Cuccia, patriarch of the shadowy, but extraordinarily influential investment bank, Mediobanca.
On one side of the merger is Ferruzzi Finanziaria, the vast Italian chemical and agricultural holding company that nearly collapsed in a wave of corruption scandals two years ago and has been surviving on a financial life-support system provided by a consortium of prominent banks ever since. On the other is Gemina, a high-profile investment company part-owned by such big names as Fiat and the insurance concern Generali, which posted a loss of L262bn lire (about pounds 100m) last year.
Out of these seemingly unpromising base metals, Italy's two masterdealers have struck gold with a highly complex merger that will create a private industrial colossus with an annual turnover forecast at around L40trn (pounds 16bn).
The new conglomerate, which has already nicknamed "Super-Gemina" in the Italian press following the announcement of the deal late last Friday, will include an expanded version of Montedison, the country's biggest chemical concern, as well as interests in pharmaceuticals, electricity, textiles, construction, insurance, food and publishing.
In any other country the extraordinary web of asset swaps involved in such a deal would have been subject to endless scrutiny by government ministers, lawyers, accountants, merchant banks and anti-trust bodies.
Since it was Italy, though, the manoeuvre was largely down to two men whose business influence has no parallel in other major industrial countries. Hardly a significant deal is struck without the approval of Mediobanca.
Characteristically, Mr Agnelli and Mr Cuccia have wrought their deal to save Ferruzzi among friends, the so-called "salotto buono" or salon of Italian business.
Thus Fiat has propped up Montedison by "giving" it two of its chemicals- related concerns - the artificial fibres company Snia Fibre and its sister firm Caffaro. Moreover, both Fiat and Mediobanca will be represented in the new conglomerate with shareholdings of eight per cent each.
The deal has sparked a furious debate about the wisdom of creating conglomerates at a time when most leading multinationals are trying to scale down and concentrate on their core businesses. It also constitutes something of a humiliation for Italy's political class, which had nothing to do with it and - given the enormous personal power of Mr Cuccia and Mr Agnelli - is unlikely to do much intervening at this stage.
- 1 Notting Hill Carnival: Woman shares selfie after being ‘punched in face for telling man to stop groping her’
- 2 Joan Rivers: 'Palestinians deserve to be dead'
- 3 Daily Show's Jon Stewart destroys Fox News for its Ferguson coverage
- 4 Botched ice bucket challenge leaves man critically injured after plane drops hundreds of gallons of water
- 5 Friends reunion: Jennifer Aniston, Lisa Kudrow and Courteney Cox perform mini sketch on Jimmy Kimmel Live
Notting Hill Carnival: Woman shares selfie after being ‘punched in face for telling man to stop groping her’
YouTube video posted by Isis militants shows 'execution of 250 Syrian soldiers'
Joan Rivers: 'Palestinians deserve to be dead'
Daily Show's Jon Stewart destroys Fox News for its Ferguson coverage
Botched ice bucket challenge leaves man critically injured after plane drops hundreds of gallons of water
Exclusive: We share blame for creating 'jihad generation', says Muslim strategist
Robin Williams Emmys tribute led by Billy Crystal criticised for including 'racist' joke about Muslim woman
The Rotherham child abuse scandal is a tale of apologists, misogyny and double standards
Scottish independence TV debate: Pumped-up Alex Salmond bounces back in bruising second round against Alistair Darling
Do you realise just how foolish the UK looks?
Ukip Douglas Carswell defection: Tory MP jumps ship to join Nigel Farage
- < Previous
- Next >
iJobs Money & Business
£20000 - £30000 per annum + OTE £40 - £50K first year: SThree: SThree Group an...
£400 - £450 per day + competitive: Orgtel: My client, a leading bank, is curre...
£20000 - £30000 per annum + OTE £40-50K first year: SThree: The SThree group i...
£300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...