Elkann, Benetton, Berlusconi, De Benedetti: great families (and disasters)

Elkann, Benetton, Berlusconi, Tronchetti Provera, De Benedetti and Colaninno: great families (and disasters). Entrepreneurial flops

Luciano Benetton he feels betrayed. This is the accusation made by the eighty-nine year old founder of the textile group of the same name in an interview given to Corriere della Sera on 25 May. A success story transformed into a bitter story of financial losses, culminating in the 2023 budget with a loss of 230 million euros. Benetton points the finger at CEO Massimo Renon, in charge since 2020, underlining how the trust placed in him turned out to be a mistake.

The financial decline of Benetton Group

The budget of Benetton Group – that is, the textile sector of the Treviso family – in recent years reports a dizzying fall: as early as 2013 the company began to record losses, with the first balance sheet in the red of 199 million. The situation has only worsened, up to the significant loss of 81 million in 2022. This decline seems to have gone into the background only thanks to the revenues guaranteed by privatizations and the management of Autostrade per l’Italia, a sure source of profit until tragic collapse of the Morandi Bridge in 2018.

Focus on other interests of the Edizione Group

After sale of highways for Italy to the State in 2021 for approximately 8.2 billion, the Edizione group, which holds 100% of Benetton through the family, continued to record profits, with a consolidated profit of 1.17 billion in 2022. This financial success guaranteed the four branches of the Benetton family an annual coupon of 100 million, highlighting how, despite the difficulties of the textile branch, the family’s economic empire has not been dented.

The events of Elkann

And what about thethe empire of the Agnelli heirs and the management by John Elkann, which despite some controversial paths and questionable decisions, such as moving the registered office of FCA to the Netherlands and the subsequent merger with the French PSA which gave life to Stellantis, continues to record economic successes. However, the industrial future in Italy appears uncertain, with production far from ambitious expectations. And this despite the struggling Fiat having obtained significant aid from the State, including all the scrapping incentives at the end of the last century, including redundancy payments.

The decline of the Republic

A separate chapter is represented by the management of the Gedi publishing group, acquired by the De Benedetti family and which includes important newspapers such as La Repubblica and La Stampa. The purchase by Elkann and the subsequent dismantling of Gedi accelerated the group’s problems, leading to a considerable decline of Repubblica, once the flagship of Italian publishing.

In an interview with La7 a few months ago, Carlo De Benedetti, a historic Italian entrepreneur, addressed open criticism towards John Elkann, accusing him of having purchased the Repubblica publishing group for fear that it could end up in the hands of Luca Cordero di Montezemolo. De Benedetti, however, is no stranger to entrepreneurial paths marked by ups and downs. Despite his unquestionable impact in the publishing and industrial sectors, his management of Olivetti and complex family dynamics have overshadowed some of his achievements.

Berlusconi’s legacy

The will of Silvio Berlusconi he created a control mechanism over the media empire left behind which inextricably binds the five children of the former Knight. Marina and Pier Silvio Berlusconi, the result of their first marriage, hold the majority in Fininvest, guarantor of control over Mfe-Mediaset. A system of alliances and internal agreements, including the one with the children born from the marriage with Veronica Lario, ensures a balance, promising a shared management of power at least for the next few years.

Tronchetti Provera and the Pirelli strategy

Marco Tronchetti Provera, at the helm of Pirelli since 1992, has demonstrated strategic entrepreneurial skills especially in 2015, when he obtained a bailout from Chinese capital. By selling a significant portion of Pirelli to Sinochem, he relinquished a portion of control while retaining significant operational influence in the company. However, this alliance led to a less optimal financial situation for Pirelli, with debt limiting its expansion and investment capabilities, also influencing its dividend policy.

The adventures of Colaninno

Roberto Colaninno, an emblematic figure of Italian industry who recently passed away, left an indelible mark with his risky financial maneuvers, in particular throughTakeover bid for Telecom Italia and the management of Alitalia. His approach based on the debt acquisition for the former Sip has burdened the telecommunications company with a mountain of debt which is the primary cause of the choice, today, to sell the network to KKR.

In April 1999, Colaninno surprised the financial and industrial world with a bold move: the acquisition of Telecom Italia. Politically supported by Massimo D’Alema, he led a consortium through Olivetti, conquering the

51% of Telecom, one of the largest telecommunications companies at that time, immediately after its privatization process. This ambitious project led to a debt of 35 billion with the banks, an astronomical figure which was then transferred to the balance sheets of Telecom Italia through a merger. This event marked the beginning of a series of complexities for the company, demonstrating the challenges associated with large leveraged transactions.

Another important chapter in Colaninno’s career was undoubtedly the privatization of Alitalia in 2008. As part of a plan desired and promoted by the then Prime Minister Silvio Berlusconi, to avoid the sale of Alitalia to Air France-KLM proposed by the previous government, led by Romano Prodi, Colaninno emerged as a central figure.

In fact, Berlusconi favored the entry of around twenty Italian entrepreneurs, among whom names such as Salvatore Ligresti and Emilio Riva stood out, into the capital of Alitalia, now freed from previous debts. Colaninno was appointed president, supported first by Rocco Sabelli as CEO and then, in 2012, by Andrea Ragnetti. Despite these moves, the management of Alitalia encountered numerous difficulties, leading to the replacement of Ragnetti with Gabriele Del Torchio, ex-Ducati. The latter guided Alitalia towards an agreement with Etihad’s Emirati partners, with the support of the government led by Matteo Renzi and the presidency of Luca Cordero di Montezemolo, a strategy which, however, did not have the desired effects.