The 20-year inheritance feud dividing the Fiat dynasty

Five years ago, members of Italy’s most celebrated business dynasty gathered at a grand 18th-century villa outside Turin following the funeral of Marella Agnelli, widow of the great 20th-century industrialist Gianni Agnelli.

But rather than
a sombre reunion, the event proved the latest flashpoint in a feud that has split the family as the late couple’s only surviving child Margherita clashed with her son John Elkann over her father’s multibillion-euro estate. They have not seen each other since, according to several relatives.

The schism was thrust back into the spotlight last month when authorities raided the home and offices of Elkann, head of the family business and chair of carmaker Stellantis, following a complaint by his mother that he had helped her mother evade Italian tax.

“Margherita Agnelli has been persecuting her three eldest children and her parents in the courts for over 20 years,” lawyers for Elkann said after the raids.

A fight over the legacy of Gianni Agnelli

The 20-year dispute has pitted Margherita against her three eldest children in a fight the 68-year-old says she is pursuing for the sake of the five children she had by her second husband.

Billions of euros in assets are in contention including Monet and Picasso artworks and a stake in Dicembre, the ultimate parent of listed conglomerate Exor, the value of whose holdings have grown 2,700 per cent to €33b (NZ$58.6b) under Elkann since his grandfather’s death more than two decades ago.

As well as Fiat, the carmaker Gianni Agnelli built into one of the biggest in the world and which is now part of global car group Stellantis, Exor holds major stakes in businesses from luxury car manufacturer Ferrari and Juventus Football Club to Dutch medical equipment maker Philips and news magazine The Economist.

“At stake is ownership of Dicembre and therefore of Exor … if Margherita were to emerge victorious in her [multiple] claims there would be a redistribution of Dicembre’s ownership stakes and Elkann would lose the majority,” said Mauro Orlandi, professor of private law at Luiss University in Rome.

When Gianni Agnelli died in 2003, his widow and daughter each inherited a 37.5 per cent stake in Dicembre as well as assets worth hundreds of millions of euros, from art to property in Italy and overseas. Elkann, his grandfather’s anointed successor, had already been gifted 25 per cent of the company.

The following year, when debt-laden Fiat’s survival was in doubt, Margherita decided she wanted out of the family business and agreed to a €1.2b payout in exchange for transferring her stake in Dicembre to her mother and relinquishing any rights over her estate.

After that settlement, made under Swiss law as Marella and Margherita each lived in Switzerland at the time, the grandmother sold part of Dicembre to Elkann’s younger siblings Lapo and Ginevra, who now each own 20 per cent, and sold the rest of her holding to John over the years.

Margherita’s change of heart

But soon after the agreement Margherita had a change of heart — prompted, she said, by the discovery that her father’s estate included hundreds of millions of euros that had been hidden abroad, a share of which she claimed she was entitled to. In 2010 she lost a legal challenge to the 2004 agreement — but that did not stop the family feud from rumbling on.

Under the settlement, Margherita also had to pay an annuity to her mother. She now claims that her mother did not pay income tax on this annuity in 2018 or 2019, arguing that she should have done so under the laws of Italy, where she insists Marella spent most of her time in the last years of her life so did not qualify for Swiss residency.

A spokesperson for Margherita told the Financial Times that she had always sought simply to defend the interests of her five children by her second husband Serge de Pahlen — and to “respect her father’s will as he had only donated 25 per cent of Dicembre to John Elkann, leaving the rest to Margherita and widow Marella Caracciolo”.

Elkann’s lawyers say Margherita cashed out in 2004 “at a time when the future of her family’s and her son’s business interests were uncertain”, and that she later changed her mind after his turnaround of Fiat, hoping to profit from the family’s additional wealth.