John Elkann of Fiat Chrysler manages to crown PSA merger

The shareholders of both companies are to approve the merger on Monday, and the closure could take place at the end of this month, according to people familiar with the situation. The new company will be called Stellantis, which incorporates a Latin word meaning “starlight” and will present new challenges to Mr Elkann, including managing relations between major shareholders.

Mr. Elkann, who is president of Fiat Chrysler and will take the same position at Stellantis, has become a skilled transactional producer since he rose to the top of the family in 2004. Although his transformation from a recent college graduate who rarely spoke in public to a the key figure behind the largest supply in the automotive industry in decades has not come without hiccups.

The grandson of Gianni Agnelli and the fifth generation of the dynasty who had a hand in founding Fiat in 1899, Mr. Elkann negotiated a previously planned merger with Renault TO

. Then he pulled the plug after deciding that the French state, Renault’s shareholder, was too difficult a partner.

Mr Elkann maintained relations with the Peugeot family, a large PSA investor, even as he prepared to merge Fiat Chrysler with their rival Renault. Mr. Elkann personally conveyed the news of that merger to Robert Peugeot, who runs his family’s investment firm, according to people familiar with their discussion. This personal touch helped her smooth the Elkann road when she returned to contact with Peugeot after the Renault deal fell apart, people said.

Mr Elkann declined to comment on this article.

While the coronavirus pandemic has eliminated or delayed other previously announced agreements, Mr Elkann has kept the merger on track. He personally negotiated adjustments that reduce the cash dividend to be paid to Fiat Chrysler shareholders, while guaranteeing a similar total long-term payment, said a person familiar with the negotiations.

Mr. Elkann’s appearance as a transaction agent paralleled his growing ability to correlate the more than 100 members of his extended family. Together they own 53% of Exor, the holding company that gives them a 29% stake in Fiat Chrysler and controls the stakes in Ferrari NV, the Italian football team Juventus, the Economist Group and other assets.

Exor’s rich dividend payments and an average annual earnings of 25% of the company’s share price over the past decade have helped Mr Elkann gain the support of his family. He also built cohesion between his cousins ​​through family rituals, including an annual football game and dinner, according to several members of the Agnelli family.

The Exor Committee includes Mr. Elkann, his sister and only two other family members, so he holds regular meetings attended by representatives of the nine main branches of the family. Although no decisions are made at these meetings, family members say they appreciate the meetings as a way for them to keep up with developments beyond what they read in the newspapers.

As president of Stellantis, Mr Elkann will probably have to navigate rocky relations with Italian trade unions and the government in Rome. Fiat Chrysler has hit its head with both in recent years. While the merger has been widely applauded in Italy, there is concern among workers who fear the long-term viability of Fiat Chrysler’s underutilized Italian factories.

Carlos Tavares, the executive director of PSA who will hold the same title at Stellantis, is expected by company observers to spend much of his time in Paris, further moving the company’s center of gravity north of the Alps. Fiat Chrysler is registered in the Netherlands, has its tax domicile in the United Kingdom and makes almost all the profit from the North American business.

Mr Elkann has defied some forecasters who say he will eventually sell part or all of the Exor package to Fiat Chrysler to invest in faster-growing businesses.

Mr Tavares will take the wheel of the Stellantis once the transaction is completed, but Mr Elkann will be called upon to help navigate the disparate interests of the new company’s wide range of investors, which will include Exor, the Peugeot family and the French government.

“Elkann will have to move from a dealer 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 attract the company in different directions.”

Mr. Elkann, who speaks English, Italian, French and Portuguese, has gone through difficult waters in the past, including when he became the leader of the family. The company lost nearly 6 billion euros, the equivalent of $ 7.3 billion, and went through four executives in the two years before taking over in 2004, and the most likely prospect for the automaker with problems in that year. The moment seemed to be bankruptcy or a takeover by a group of banks holding billions of euros in debt convertible into Fiat shares.

Mr Elkann immediately hired Sergio Marchionne as CEO, a move that changed his family’s fortunes. As Mr. Marchionne corrected the Fiat list, Mr. Elkann began to learn from the executive, who would become his mentor and close friend.

In the two and a half years since Mr Marchionne’s death, Mr Elkann has taken over a leadership role. Mr. Elkann, in a gentle manner, does not tend to raise his voice in public, to denigrate competitors or scary journalists – as Mr. Marchionne tended – but those who know him attribute their obstinacy to finding a partner to merge. with Fiat Chrysler influenced the CEO he hired at 28 years old.

While Mr Elkann has been successful with some of his recent investments, most notably taking over the 2015 PartnerRe reinsurer, most of the rise in Exor share prices over the last decade can be traced to Mr Marchionne’s managerial and financial acumen. The pressure is on Mr Elkann to continue this.

Throughout his professional career, he helped his chances by surrounding himself with experienced people. He meets Warren Buffett and regularly attends Berkshire HathawayS

annual meeting in Omaha, Neb. Mister. Elkann bought PartnerRe after consulting with Ajit Jain, Berkshire’s vice president of insurance operations and possible successor to Mr Buffett.

The Exor Partner Board, which advises the company’s directors, is chaired by George Osborne, former head of the UK Treasury, and recently added Daniel Ek, founder of Spotify Technology SA, and Ruth Porat, chief financial officer at the parent company. Google Alphabet Inc.

When Mr. Elkann set up a fund at Exor to invest in startups, he turned to some of Silicon Valley’s most famous investors for advice. And when he decided to buy majority control of a Chinese fashion company last month, he invested in French fashion giant Hermès International. TO

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Write to Eric Sylvers at [email protected]