Italy's chocolate king faces succession questions

Thu Oct 17, 2013 11:16am EDT
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By Lisa Jucca and Giancarlo Navach

MILAN (Reuters) - Michele Ferrero, Italy's richest man and the owner of a global chocolate and confectionery empire, has always resisted the temptation to allow outsiders to buy into his company.

In a statement on Thursday, his son Giovanni, the Chief Executive of the Ferrero group, rejected suggestions the Italian company had been approached by larger Swiss competitor Nestle and said Ferrero was not for sale.

But like other family-controlled Italian companies that flourished in the postwar boom, the ambassador of chocolate-hazelnut spread Nutella, now 88, may soon be discussing succession plans.

His other son Pietro, the chosen heir to run the Piedmont-based empire, died of a heart attack in 2011 while riding a bicycle in South Africa. He was 47 and his death opened the way for the ascent of younger brother Giovanni, whom industry insiders consider less interested in running the business.

"There is certainly an issue of succession," said a financial source with knowledge of the situation. "Either the father opens up to an external management team, or he sells it."

However other sources said the family may decide to continue without making such changes.

The Ferrero group, also known for its Ferrero Rocher pralines and chocolate Kinder eggs, is seen by analysts and bankers as Italy's most valuable privately owned company.

While many cash-strapped Italian companies, including telecoms operator Telecom Italia, are in crisis or being sold to foreigners, Ferrero continued to grow even through the current economic downturn, Italy's longest in 60 years.   Continued...

A woman takes a Kinder Ferrero chocolate in Milan November 20, 2009. REUTERS/Stefano Rellandini