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Tuesday, August 4, 2015

Industrialist Heir to the #Fiat Dynasty Charts His Course @NYTimes

John #Elkann continues to consolidate the Agnelli empire through Exor's purchase of PartnerRe reinsurance  business.


Industrialist Heir to the Fiat Dynasty Charts His Course

Takeover battles are often high drama, played out with heated words and outsize personalities.

Yet a protracted fight over a Bermuda insurance company was won by a 39-year-old deal maker — John Elkann — whose quiet, persistent style has been quickly reshaping the empire of Italy’s best-known industrial dynasty.

Mr. Elkann, the grandson of Gianni Agnelli, has run the $12 billion Agnelli family investment firm Exor for more than a decade. With Monday’s $6.9 billion acquisition of the insurer PartnerRe, he has clinched his biggest deal yet.

The acquisition represents a new level of ambition for Mr. Elkann as he seeks to continue building Exor into a global conglomerate. Even as the Italian firm disposes of holdings like the real estate services company Cushman & Wakefield, it is seeking to expand its stake in the Economist Group, publisher of The Economist, and turn Fiat Chrysler into a consolidator within the global auto industry.

“We really do see ourselves as a business builder,” Mr. Elkann said in a telephone interview.

As Exor’s ambitions grow, however, it may face more obstacles, including more takeover targets — perhaps even General Motors itself — who have no intention of selling.

Empire-building may not seem like the natural course for the soft-spoken Mr. Elkann. He does not pursue the spotlight as lustily as did his grandfather — who was known for his custom suits and for once crashing a Ferrari into a meat truck at 120 miles an hour — and his brother, Lapo, an entrepreneur and socialite.

But Mr. Elkann has consolidated the Agnellis’ holdings into one vehicle, Exor. And most crucially, he helped oversee the revival of Fiat, which his family helped to create more than a century ago. Now, under his mentor, Sergio Marchionne, Fiat has grown, in part by buying Chrysler as part of the American carmaker’s government-backed turnaround.

The son of Margherita Agnelli and Alain Elkann, a French-Italian writer, John Elkann had long been groomed to play a role in his family’s business. Born in New York City and raised in Britain, Brazil and Paris, he took jobs within the business at a young age. At 21 years old, he took a seat on the board of Fiat.

But he was thrust unexpectedly into leading the family holdings a half-decade later, after the deaths of his grandfather and his great-uncle Umberto. Fiat, mired in billions of dollars in debt, was under pressure from lenders to sell.

And the chief executive of Fiat at the time tried to seize control of the carmaker by seeking to become chairman as well. The Agnelli family refused, paving the way for a change of chief executive. Filling that role in 2004 was Mr. Marchionne, an outspoken longtime executive within the family’s holding who was tasked with the huge turnaround.

“As I reflect on the past 10 years, there’s no doubt that the most difficult situation was around the car business,” Mr. Elkann said.

Mr. Marchionne spearheaded a revival of Fiat, putting it in a position in 2009 to buy the struggling Chrysler. Initially looked at with skepticism, the merger of the carmakers worked. The stock of the combined Fiat Chrysler Automobiles has risen nearly 81 percent since the company went public last year. (The family maintains a roughly 29 percent stake in the manufacturer.)

And Exor’s financial performance has improved as well. The conglomerate’s net asset value, or the worth of its investments, rose nearly 15 percent last year, to 10.2 billion euros.

Exor has also embarked on other deals. Two years ago, it agreed to sell its stake in SGS, a Swiss testing company, for $2.6 billion. This year, the firm backed the $2 billion sale of Cushman & Wakefield to another real estate company after having helped expand Cushman & Wakefield’s business.

And Exor is helping Fiat Chrysler take Ferrari public, though still retaining a big stake in the sports-car maker in the process.

Among Exor’s other holdings are CNH, a maker of construction equipment, and the reigning champions of Italian soccer, Juventus.

To Mr. Elkann, the moves have been to rebalance Exor’s businesses portfolio and make it more global. Where a decade ago the investment vehicle drew three-quarters of its sales from Europe, today it draws less than one-third from the Continent.

That move to internationalize one of Italy’s established manufacturers has sometimes prompted jabs from rivals. Diego Della Valle, the head of the Tod’s luxury goods empire, said last year that the Agnellis “had and took everything from Italy and the Italians, and in the moment of need, ran away in the half-light to settle best they could their personal business.”

Still, for Mr. Elkann, the most pressing step to continuing his strategy was buying a services business that generated consistent profits and counterbalanced the industrial operations. A natural target, according to Mr. Elkann, was PartnerRe, a reinsurer that Exor helped create in 1993.

Doing so meant halting PartnerRe’s own plans to merge with a competitor, Axis Capital Holdings. Exor publicly enticed PartnerRe shareholders with a succession of higher-priced offers. Despite months of resistance from the takeover target, the Italian conglomerate was able to sway several influential investor advisory firms that recommended rejecting the merger with Axis.

On Monday, four days before PartnerRe shareholders were set to vote on the Axis deal, the reinsurer agreed to sell itself to Exor for $140.50 a share and a special preclosing dividend of $3 a share.

“We have carefully and thoroughly evaluated each development over the last several months, and believe that this thoughtful and deliberate approach was critical to delivering a transaction that represents a significant improvement in the price and terms of Exor’s original proposal,” Jean-Paul L. Montupet, PartnerRe’s chairman, said in a statement.

Mr. Elkann sought to model his management in part on a number of other successful family investors. He has met with Warren E. Buffett of Berkshire Hathaway, as well as Sweden’s Wallenberg family and Jorge Paulo Lemann, the Brazilian billionaire whose 3G Capital controls Burger King and Heinz.

But Mr. Elkann insists that he is charting his own path, creating what he describes as a company focused on managing permanent capital and building businesses. For now, that means digesting PartnerRe. Yet he conceded that the cash PartnerRe generates could help finance future deals, much as Berkshire Hathaway’s insurance operations provide the firepower for Mr. Buffett’s deal making.

Even as Exor pursued PartnerRe, however, its most prominent investment was floating potential deals of its own, with Mr. Elkann’s backing. Mr. Marchionne has said publicly that he hopes to be a consolidator.

So far, the most natural merger partner, G.M., has flatly refused to entertain the notion, despite Mr. Marchionne’s and Mr. Elkann’s arguments.

“The best thing we can do is to be totally focused on the G.M. shareholder and to execute our plan,” Mary T. Barra, G.M.’s chief executive, said in June.

Nevertheless, Mr. Elkann said that Exor would eventually seek out other investment opportunities to continue its quest for growth.

“If you look at the last 10 years, we’ve really simplified, from many holding companies to one,” Mr. Elkann said. “The next decade ahead is going to be more of a decade where we build and try to grow Exor.”



Insalist Heir to the Fiat Dynasty Charts His Course - NYTimes.com


Wednesday, July 8, 2015

The harsh reality of an unraveling #eurozone confronts Europe at large, while #China tries to control the markets

Stratfor's Third Quarter Forecast 2015

Stratfor
said at the beginning of 2015 that this would be the year when Europe
would be knocked out of complacency. The third quarter is when the harsh
reality of an unraveling eurozone confronts Berlin and the eurozone at
large. Germany will act tough while a divided camp of creditors press
Berlin for a deal for fear of setting a dangerous precedent with a
"Grexit." Germany needs a deal with Greece and can negotiate one, but it
will come at a price that threatens the credibility of its leadership
in the eurozone. The Greek government under Syriza is likely to fall,
either from a banking crisis or from a rebellion within its own ranks
upon signing a deal. And any deal struck between Greece and its
creditors will be doomed; Greece will be unable to implement deep
reforms, and Germany will be unwilling to release funds under these
circumstances. There will be a great deal of commotion this quarter over
face-saving measures to avoid a Grexit. Beneath the speeches, the path
to a Grexit is already being paved.



But this is not the only
crisis afflicting Europe. The standoff between Russia and the West will
become more visible as Russia and the United States engage in
conventional military posturing on the Continent. Russia's tightening
relationship with China will meanwhile be on display as the two advance
joint initiatives to develop economic alternatives to the West.



China
will not be immune to financial jitters either, as Beijing, for lack of
better options, intervenes to prop up its stock market to avoid the
political, social and financial consequences of an outright collapse.
Beijing has the tools to manage a decline in its volatile stock market,
but any moves it makes in the short term to tame the market without a
reliable investment alternative come with the long-term consequence of
slowing private consumption growth and thus upsetting its strategy to
rebalance the economy amid a wider slowdown.



In the Middle East,
the United States will be juggling three tasks: seeing through a
negotiation with Iran, reassuring its Sunni Arab allies and preventing
countries such as Turkey from adopting a renegade foreign policy. As the
Syrian rebellion gains momentum, so will talk of a post-al Assad
power-sharing arrangement. Divisions on the battlefield and among rebel
sponsors, however, will prevent any such negotiation from coming to
fruition.



Between a deepening European crisis, potential increases
in oil output from major Persian Gulf producers and high summer demand
in the United States and China, supply and demand in global oil markets
do not point to any major swings in price. Venezuela will still be under
deep financial strain as it feels out a negotiation with the United
States and offers limited concessions to the opposition in hopes of
finding economic relief. Mexico will stay on course with its energy
reforms, taking its first big step in auctioning off shallow-water
offshore exploratory blocks while taming challenges to restructuring
from the Petroleos Mexicanos labor union. To the north, Canada will
further its commitment to link its energy resources to global markets if
the British Columbian parliament votes as expected to approve Petronas'
NorthWest liquefied natural gas venture, Canada's first LNG export
facility. With Canadian national elections in October, campaigning is
fixated on how far Canada should go in cementing its place in the energy
world.



Read the whole forecast here: Stratfor's Third Quarter Forecast 2015 | Stratfor



Related Links

Stratfor's Annual Forecast 2015

Stratfor's Second-Quarter Forecast 2015

Thursday, June 25, 2015

In 9 Years' Existence, #UNHRC Condemned #Israel More Times Than Rest of World Combined - @UNWatch

This is just utterly ridiculous!


Report: In 9 Years' Existence, UNHRC Condemned Israel More Times Than Rest of World Combined
Ahead of Debate on Gaza Report, UN Watch Releases Evidence of Systematic Bias at UN's Top Rights Body
GENEVA, June 25, 2015 - In
the nine years of its existence, the UN Human Rights Council has
condemned Israel more times than the rest of the world combined,
revealed UN Watch today, ahead of a new report to be released by the
Geneva-based NGO that documents endemic selectivity and politicization
at the world body.
The
outcome resolution for the latest Gaza report, to be introduced at the
UNHRC this week by the Palestinians together with the Arab and Islamic
states, will condemn Israel exclusively, and will mark the 62nd
resolution targeting Israel since the new and improved Council was
created in 2006 -- while the total of all other UNHRC condemnatory
resolutions for the rest of the world amounts to 55, with most of the
worst violators given a free pass, if not a seat on the council itself.
Sadly,
with members like China, Russia, Cuba, Saudi Arabia, Pakistan,
Venezuela and Qatar, the UNHRC today may possibly rank as a more corrupt
international organization than FIFA.
UN Watch released the following statistics today, and urged Secretary-General Ban Ki-moon to again rebuke the Human Rights Council for treating one particular group of human beings, Israelis, out of all proportion:
I. Total UNHRC Condemnations, 2006-2015
Israel: 61
Syria: 15
Myanmar: 12
North Korea: 8
Iran: 5
Belarus: 4
Eritrea: 3
Sri Lanka: 3
Sudan: 2
Libya: 2
Honduras: 1
Afghanistan: 0
Algeria: 0
China: 0
Cuba: 0
Equatorial Guinea: 0
France: 0
Iraq: 0
Lebanon: 0
Russia: 0
Pakistan: 0
Somalia 0
Turkmenistan: 0
UK: 0
USA: 0
Uzbekistan: 0
Venezeula: 0
Vietnam: 0
Yemen: 0
Zimbabwe: 0


















Total on Israel: 61
Rest of World Combined: 55
Methodology:
includes all resolutions from 2006 to 2015 that singled out specific
countries for condemnation under agenda items 4 and 7. Excludes
resolutions that also praise the country concerned, or those adopted as
matters of "technical cooperation."
__________________________________________________
II. Country-Specific Agenda Items: Only Against Israel
There is a special agenda item targeting Israel
at every regular session of the UNHRC. No other country in the world
has its own agenda item -- not Sudan, not Syria, not North Korea. It is
under this agenda item No. 7 on Monday, which Western democracies in the
last year have mostly boycotted due to its selectivity, that the
Schabas-Davis report on Gaza will be formally debated.
__________________________________________________

Thursday, June 11, 2015

Uncharted Waters: The Evolution of the #Aquaculture Industry @Stratfor

Uncharted Waters: The Evolution of the Aquaculture Industry

Dietary trends come and go, but fish are generally considered a stable component of any healthy diet. Unsurprisingly, demand for fish products has outstripped the supply from wild catches over the past two decades. But a relatively new industry driven by this high level of demand is emerging: aquaculture.
Aquaculture is to water what agriculture is to land; it is the cultivation of aquatic organisms, such as fish or shellfish. As an industry, it has begun to fill the gap between supply and demand, adding a yield of 80 million tons per year to that of wild catches to reach a combined annual total of more than 180 million tons. Localized aquaculture is a very old industry in many parts of the world, well connected to local food supply chains. However, a vast increase in scale has created problems for global production chains as a whole.
Like any burgeoning industry, aquaculture still has a number of obstacles to overcome as it carves out its place in the global market. As in agriculture, there are growing concerns about aquaculture's encroachment on natural habitats and use of antibiotics and feeds of questionable quality. However, unlike agriculture, which has had centuries to develop, aquaculture has not yet fully adjusted to meet a global market, and it lacks a robust and stable production chain. Essential feed components are still harvested far from low-cost seafood producers, who in turn are located continents away from high-end seafood consumers. The logistical challenges of connecting each of these links into a smoothly functioning global industry remain so daunting that aquaculture's future, though promising, will also include many formidable challenges to overcome. 

Nutritional Demand: From Fork to Fitness...

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