John Elkann at Fiat Chrysler requires coronation performance with PSA integration

The shareholders of the two companies are expected to agree to the merger on Monday, and the closure could come as early as this month, according to people familiar with the situation. The new company is called Stellantis, which introduces a Latin word meaning “shining with stars,” and will present Mr. Elkann with new challenges, including relationship management among key stakeholders.

Mr. Elkann, who is chairman of Fiat Chrysler and assumes the same position at Stellantis, has been an adroit contract maker since rising to the top of the family in 2004. Although he switched from graduate college recently rarely spoke publicly to no major figure came behind the biggest car business deal in decades without bumps.

Grandson of Gianni Agnelli and the fifth generation of the family involved in founding Fiat in 1899, Mr Elkann negotiated a previously planned merger with Renault SA

. He then pulled the plug after deciding that the French state, Renault’s shareholder, was too inconvenient a partner.

Mr Elkann had maintained relationships with the Peugeot family, a major PSA investor, even as he prepared to link Fiat Chrysler to Renault, their rival. Mr Elkann personally handed over the news of that merger to Robert Peugeot, who heads his family ‘s investment company, according to people familiar with their debate. That personal communication helped pave the way for Mr. Elkann when he called back to Mr. Peugeot after his Renault contract collapsed, the people said.

Mr. Elkann declined to comment for this article.

While the coronavirus pandemic was eradicating or delaying other previously mentioned conditions, Mr. Elkann kept the integration on track. He was personally negotiating changes that cut the cash dividend payable to Fiat Chrysler shareholders while promising a similar full payment over the long term, said an acquaintance of the conversations.

Mr. Elkann’s emergence as a contract maker has run concurrently with his ability to blame more than 100 members of his extended family. Together they own 53% of Exor, the holding company that owns a 29% stake in Fiat Chrysler and controls stakes in Ferrari NV, Juventus Italian football team, Economist Group and other assets.

Exor’s wealthy share payments and an average annual gain of 25% in the company’s share price over the past decade have helped Mr. Elkann earn his family’s support. He also built coherence among his cousins ​​through family rituals, including a football game and a year-long dinner, according to several Agnelli family members.

The Exor board includes Mr. Elkann, his sister and just two other family members, so he holds occasional meetings with representatives from the nine main branches of the family. Although no decisions are made at these meetings, family members say that they value what they meet as a way for them to keep up with improvements beyond what they expect. reading in the newspapers.

As chairman of Stellantis, Mr Elkann seems to have to lead rocky ties with Italian unions and the government in Rome. Fiat Chrysler has made headlines with the duo in recent years. While unification has been encouraged in Italy as a whole, there is anger among workers who fear the long-term viability of Italian factories Fiat Chrysler.

Carlos Tavares, PSA chief executive with the same Stellantis title, expects the company’s viewers to spend much of his time in Paris, moving the company’s further pressure center north of and the Alps. Fiat Chrysler is Dutch registered, domiciled in the UK and makes almost all of its profits from North American business.

Mr Elkann has challenged some prognosticators who said he would eventually sell part or all of Exor’s Fiat Chrysler to invest in fast-growing businesses.

Mr Tavares will take over the Stellantis wheel once the deal closes, but Mr Elkann will be asked to help manage the differing interests of the new company’s large range of investors, which include Exor, the Peugeot family and the Welsh government. Frainge.

“Elkann needs to move from contracting to a mediator,” said Giovanni Favero, a professor in the management department at Ca ’Foscari University in Venice. “American, Italian and French interests will try to drag the company in different directions. ”

Mr. Elkann, who speaks English, Italian, French and Portuguese, has steered through difficult waters in the past, including when he became the leader of the family. . The company had lost nearly € 6 billion, equivalent to $ 7.3 billion, and cycled through four CEOs in the two years before it took over in 2004, which appeared to be a bankruptcy or takeover was a troubled car manufacturer at the time. by a group of banks that have billions of euros in debt that can be converted into Fiat shares.

Mr Elkann immediately hired Sergio Marchionne as Chief Executive, a move that changed his family’s fortunes. As Mr. Marchionne announced the Fiat listing, Mr. Elkann began learning from the agency, which would be a mentor and a good friend.

In the 2½ years since Mr Marchionne’s death, Mr Elkann has taken on more leadership roles. Polite Mr. Elkann is not inclined to raise his voice in public, rejecting rivals or browbeat journalists – as Mr. Marchionne tended to do – but those who know him dismiss it as difficult. to find a partner to join Fiat Chrysler to the influence of the Director he hired when he was 28.

While Mr. Elkann has been successful with some of his recent investments, most notably the 2015 takeover of PartnerRe, most of the increase in the price of Exor shares over the past decade can be gone to lead to Mr. Marchionne’s management and finance acumen. The pressure is on Mr Elkann to keep that going.

Throughout his professional career, he has helped his opportunities by being surrounded by experienced people. He knows Warren Buffett and regularly attends Berkshire Hathaway‘s

annual meeting in Omaha, Neb. Mr Elkann bought PartnerRe after consulting with Ajit Jain, vice chairman of Berkshire insurance activity and a potential follower of Mr Buffett.

Exor Partners Council, which advises company executives, is chaired by George Osborne, former head of the UK Treasury, and recently added to its ranks Daniel Ek, founder Spotify Technology SA, as well as Ruth Porat, chief financial officer at Google Alphabet Inc.

When Mr. Elkann set up a fund within Exor to invest in start-up rates, he approached some of Silicon Valley’s best-known investors for advice. And, when it decided to buy majority control of a Chinese fashion company last month, it invested in French fashion giant Hermès International SA

.

Write to Eric Sylvers at [email protected]