(Milan) - Michele Ferrero, Italy's richest man and the owner of a global chocolate and confectionery empire, will not allow outsiders to buy his company.
In a statement on Thursday, his son Giovanni, the Chief Executive of the Ferrero group, rejected suggestions the Italian company is holding talks with Swiss competitor Nestle and said Ferrero is not for sale.
But like other family-controlled Italian companies that flourished in the postwar boom, Michele Ferrero, now 88, will soon have to discuss succession plans.
His older 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, who is 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 will open up to an external management team, or he will have to sell the company."
However, other sources believe 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 Italy's most valuable privately owned company. With sales of nearly 8 billion euros, Ferrero is worth 18 billion euros.
Fashion house Armani, another Italian global private brand that could face a succession issue, has an estimated market worth of at least 6 billion euros.
A man of few words, Ferrero senior turned a Piedmont-based chocolate factory into a world giant. He is known for running Ferrero with an iron fist but is also loved by locals for a tendency to give back to his community and by employees for the company's generous working conditions.
Until a couple of years ago, Michele commuted daily by helicopter from his Montecarlo villa to the company headquarters in the northwestern provincial town of Alba to take an active role in the tasting and designing of new products.
The company, which nearly four years ago toyed with the idea of making a bid for British rival Cadbury, is cash-rich and not in an immediate need of financing, several bankers and people familiar with the situation said.
"While Michele is alive, it's difficult to think about a sale but not impossible," said an insider when asked about a possible tie-up with Nestle or another competitor.
Nestle, which has denied any plans to carry out a major acquisition in the short-term, already has a strong foothold in Italy. In 1988 it acquired pasta-maker Buitoni and chocolate-maker Perugina and 9 years later, mineral water group San Pellegrino.
Analysts say a merger of the Nestle and Ferraro could potentially turn the Ferrero group into Nestle's biggest single shareholder.
adapted from Reuters
