The Ray-Ban family feud

The late Leonardo Del Vecchio must be “rolling in his grave”, said The Observer.

The Italian businessman turned a “small optical workshop in the Dolomite foothills” into one of Italy’s most storied luxury fashion companies. He then decided to split his EssilorLuxottica empire – which owns Ray-Ban, Oakley and Persol among around 150 brands in total – between his seven children and his widow “in the hope that they would co-operate without the need to name a successor”.

Now, four years after his death, a family feud “is draining patience and payouts”.

Industrial relations

Del Vecchio’s will left a 12.5% stake in the family holding to each of his eight heirs, but his 31-year-old son Leonardo Maria, an “entrepreneur and occasional DJ”, has been attempting to “unpick” the arrangement.

Over the summer, he launched a €10 billion bid to buy a combined 25% stake in holding company Delfin from two of his siblings, giving him a majority 37.5% stake. Valued at roughly €50 billion, Delfin controls around a third of EssilorLuxottica.

Delfin’s voting rules require an 88% supermajority shareholder approval for major decisions, giving any one of the eight heirs veto power. Leonardo Maria’s half-brother, Rocco Basilico, argued that the buyout plan was significant enough to require supermajority approval. He later withdrew his legal challenge, but the bid collapsed after the Delfin board failed to give would-be financial backers the assurances they sought.

Last week, Leonardo Maria returned with an even more audacious €29.6 billion bid to take control of the entire family holding in Delfin. If accepted, the proposed buyout would block a rival approach from Czech arms billionaire Michal Strnad, “while vaulting Leonardo Maria into the dominant position in one of Italy’s most important industrial families”, said Bloomberg.

Seamless transitions

The outcome of the increasingly bitter fight for control of the company “carries weight well beyond the family”, said Euronews. As well as owning a substantial stake in EssilorLuxottica, Delfin also “holds influential positions in some of Italy’s most important financial institutions”, including Banca Monte dei Paschi di Siena, Assicurazioni Generali and UniCredit.

The infighting at Delfin is also a warning to Italy’s legions of family firms facing generational change, Carlo Verdone, head of the industrial association Federitaly, told The Times. “Ten per cent of Italy’s family firms are run by bosses in their seventies, it’s a serious problem.”

While some, such as the Agnelli family, who control car giant Fiat and Juventus football club, have been mired in court cases over inheritances for years, other patriarchs have ensured a seamless transition. Silvio Berlusconi, the late media tycoon and former Italian prime minister, gave his two eldest children a controlling interest in his Fininvest companies, while his remaining offspring received a minority stake that was enough to support them for life.

In the case of the Del Vecchios, however, “an effort to have complete equality – and potentially preserve family peace that way – has not worked”, Bridget Kustin, an economic anthropologist at Oxford University’s Saïd Business School, told The Observer. Such disputes “can have extremely small, intimate, private family origins”, such as “a perception of favouritism, a childhood feud”.