Succession fight grips Italian family businesses after COVID scare

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MILAN, Feb 3 (Reuters) – For years, Dionisio Archiutti had watched his father toy with the idea of ​​bringing a new investor into the family business, but he knew time would not necessarily help the 80-year-old decide.

“Italian entrepreneurs often tighten control of their companies as they age, fearing there will be no future without them at the helm,” he said.

A year into the pandemic, however, Giacomo Carlo Archiutti sold 30% of the kitchen maker he founded in 1967 in Italy’s industrial northeast to a private equity firm.

Before the pandemic, the Archiuttis would have stood out as an oddity, an Italian family business that welcomed an outside investor as a first step in tackling succession planning.

Now, however, bankers say they are overwhelmed by requests to vet potential deals from small and medium-sized businesses (SMEs) facing challenges from supply chain disruption to financing the investments needed to keep up with the digital and environmental business standards.

The pandemic has shown companies that they can be affected by a tsunami, making them aware that they must deal with generational change,” said NB Aurora CEO Francesco Sogaro.

For the Archiuttis, NB Aurora now holds two of Veneta Cucine’s five board seats and works alongside the family to steer their growth strategy in a “subtle but effective” way.

“You certainly can’t be expected to tell entrepreneurs of my father’s generation what to do. However, thanks to the fund’s experience, we have taken some bolder steps,” Archiutti said.

Family businesses are the backbone of the Italian economy and nearly a third of them are in the hands of a 70-year-old leader, data from Bocconi University’s AUB research center shows. And succession remains a deep-seated problem.