Family Feud Threatens €46 Billion Tech Empire
Leonardo Del Vecchio, founder of EssilorLuxottica, established a vast business fortune and sought to ensure its longevity after his death. However, ongoing family disputes now threaten to dismantle his €40 billion (approximately $46 billion) legacy.
Complex Succession Battle
Del Vecchio designated eight heirs and entrusted a team of experienced advisors with managing his eyewear empire. Four years of contentious battles between the newly wealthy heirs, disagreements among advisors, and a failed attempt by his son, Leonardo Maria Del Vecchio, to resolve the situation – a DJ and occasional host for artists like 50 Cent and French Montana – have led to a governance crisis within one of Italy’s most significant corporate entities.
Delfin Sarl’s Dominance
The family holding company, Delfin Sarl, is the largest shareholder in both EssilorLuxottica and Banca Monte dei Paschi di Siena SpA, the world’s oldest bank. Sources indicate negotiations regarding Del Vecchio’s succession could lead to the family separating their stake in EssilorLuxottica from its financial assets, but escalating disputes increase the risk of a contentious split.
Failed Buyout Attempt
Early this year, a potential solution involving Leonardo Maria’s offer to purchase shares from two siblings, Luca and Paola, for €10 billion stalled. Approved by family vote in April, the proposal subsequently fell through. The decline in EssilorLuxottica’s stock price, due to its ownership of Ray-Ban and partnership with Meta Platforms Inc. in developing AI-powered smart glasses, reduced the value of Delfin’s assets. Leonardo Maria also sought to include €1 billion in existing debt within the deal, but Delfin’s board, divided, refused to guarantee the transaction in case of his default.
Refinancing and Potential Sale
EssilorLuxottica’s stock plummeted 49% from its November peak, representing a loss of €23.4 billion. Leonardo Maria is now pursuing a €1.1 billion refinancing with Apollo Global Management Inc., potentially expandable to €10 billion, providing liquidity for future opportunities. A proposed alternative involves separating the eyewear division from the bank and insurance holdings, potentially for sale to generate liquidity for family members or restructure Delfin. This idea was initially suggested by Leonardo Maria’s brother, Rocco Basilico, but faces internal resistance due to the consolidation occurring in the Italian banking sector.