Agnelli’s EXCLUSIVE heir had merger talks with Armani to build a luxury empire – sources

  • John Elkann explored connection with 87-year-old designer – sources
  • Exor, Ferrari used as possible investment vehicle -sources
  • Armani postponed the last opening at the beginning of July – sources
  • Move reflects Elkann’s ambitions to develop in luxury

LONDON, July 16 (Reuters) – John Elkann, a descendant of the Italian Agnelli family, has explored a possible tie-up with fashion designer Giorgio Armani as part of a plan to build a luxury conglomerate potentially anchored around Ferrari ( RACE.MI), five of the sources familiar with the matter told Reuters.

Elkann, who chairs Franco-Italian automotive group Stellantis (STLA.MI), has offered to buy a minority stake in the Milan fashion house run by Giorgio Armani, 87, but his latest proposal was pushed back earlier this month. -Here, two of the sources said, speaking on condition of anonymity.

The deal would have established the Agnellis as major players in the fashion industry alongside the Arnault and the Pinaults in France.

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Talks with Armani – who is valued by analysts at around 6 billion euros ($ 7.09 billion) – have not progressed due to the designer’s reluctance to sell, two of the sources said, adding that discussions were informal and no bank was involved.

A spokesperson for Elkann and the family holding company Agnelli Exor (EXOR.MI) said: “Exor has not taken any action and Exor has made no proposal (for Armani).”

Armani declined to comment.

A possible deal with Armani was said to have been made through investment firm Exor or the carmaker controlled by Exor Ferrari (RACE.MI) – but Elkann’s latest offer was rejected, the sources said.

“The talks are dead for now,” said one of the sources.

The move reflects the efforts of the founders of Fiat Chrysler – who own 53% of Exor – to expand beyond the automotive industry and increase their exposure to the luxury market after a series of recent investments.

Exor took a 24% stake in Christian Louboutin in March as part of a deal that valued the French brand, most famous for its iconic stiletto heels with red lacquered soles, to 2.25 billion euros.

In June, it partnered with The World-Wide Investment Company of Hong Kong to support mid-size Italian companies focused on high-end consumer goods. Last year, he became the first shareholder of the Chinese luxury group Shang Xia, co-founded by the French Hermès.

“If there is anyone who could create a serious competitor to the French conglomerates, it is Elkann,” said a banker familiar with his strategy.

“He has the money, the credibility and the family prestige to do it.”


Speculation over succession plans for the fashion house founded in 1975 by Armani, known as King Giorgio, has intensified. Read more

The brand, which is famous for its sleek suits and evening gowns, is expected to attract interest from French luxury firms LVMH (LVMH.PA) and Kering (PRTP.PA), sources from the groups told Reuters. that they said Armani had not. want to sell to a foreign group.

Armani told US magazine Vogue in April that he might consider partnering with another Italian company, opening the door to a possible business partner for the first time.

He said the COVID-19 crisis had “made us open our eyes a little”. Read more

The Milan-based fashion house, whose net turnover rose 2.3% to 2.16 billion euros in 2019 after three years of decline, has not yet published its 2020 results.

The company is one of Italy’s trophies and its valuation – which hovers around three times its sales – could even reach 8 billion euros, a Milan-based analyst said.

Armani, who has no children, created a foundation in 2016 that would serve as a succession tool, preventing his business from being bought out or dismantled after his death.

In June, after showing off his latest menswear collection, he hinted at succession plans, saying he was preparing for his future with his closest associates. Read more

($ 1 = 0.8465 euros)

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Reporting by Pamela Barbaglia, Gwenaelle Barzic, Silvia Aloisi and Sarah White; Additional reporting by Claudia Cristoferi and Giulio Piovaccari in Milan. Editing by Jane Merriman

Our Standards: Thomson Reuters Trust Principles.

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