March 30, 2010 3:00 am

Generali returns to the not so Holy Roman Empire

Mediobanca has unanimously recommended Cesare Geronzi - its own head - as its choice for chairman of Assicurazioni Generali, arguably Italy's most important financial institution.

The bank - the core shareholder of Europe's third largest insurer with nearly 15 per cent - did not even bother to announce formally its nominees for the top positions and board of Generali. Instead, last Friday it leaked out the 19 names: a move indicative of the bank's level of respect for the other 85 per cent of shareholders in Europe's third largest insurer.

For the record, the six men responsible for the historic choice are UniCredit chairman Dieter Rampl, Mediobanca chief executive Alberto Nagel, Mediobanca chief operating officer Renato Pagliaro, Pirelli chairman Marco Tronchetti Provera, French financier Vincent Bolloré and last but not least the man of the moment himself, Mediobanca chairman Mr Geronzi.

It has long been the case that Mediobanca's stake in Generali secures those on its nominee list the lion's share of the board seats at the 177-year-old insurance group. That should cement the power-broking Mr Geronzi the chairmanship he has long coveted. Thereafter, the insurer will be seen to have entered decisively into the sphere of influence of Rome and all it represents in a way that until recently would have seemed difficult to imagine.

For whatever other labels Mr Geronzi and his circle might object to, they would never deny he represents the Roman way of doing business. Indeed, they would probably regard this as a badge of honour.

Of those who signed off on Mr Geronzi's ticket to Trieste, one in particular merits a special mention. Vincent Bolloré had the power from the outset to block the consensus the nominations committee insisted on. Indeed, he toyed with all the parties right up to the day of the vote, leading many to believe he would stand by his old friend and mentor, the present Generali chairman Antoine Bernheim. That would have seen the veteran French financier stay on at the helm in Trieste for another stint in the absence of a consensus view on his replacement.

But it seems that Mr Bolloré's unconditional gratitude until now, to Mr Bernheim for the role the latter played in assembling his protégé's fortune has finally found its limits.

This comes as little surprise to those who over the years have watched Mr Bolloré deploy a ruthless streak that would have equipped him as well in ancient Rome as it does today in modern Milan. His last-minute decision to flip his support to favour Mr Geronzi and a campaign that was Italy's worst kept secret, proved decisive. Thereafter all the other committee members dutifully delivered the required consensus and consigned Mr Bernheim to the sidelines.

The fine print of Friday's leak tells us Mr Bolloré's immediate reward will be the vice-chairmanship of Generali to add to his board and committee memberships at Mediobanca. But students of Mr Bolloré's past machinations believe this is just the beginning of his designs for Generali. For the French financier has always had a penchant for waging long wars of attrition in his business dealings as, for example, he has been doing across the Channel with the UK's Aegis media buying group.

The Frenchman and the new Generali chairman may have now become best friends, but they will still be carefully watching their own backs. In Trieste these days everybody will soon have to adapt to the Roman way of doing things.

Time for a change?

Swatch, the biggest watch manufacturer in the world, seems to be tempted from time to time to branch out into other luxury sectors. The most obvious is jewellery. So when the Swiss company's chief executive Nick Hayek suggested that Bulgari was an interesting brand that could be developed, the market quickly jumped to conclusions and sent the shares of the Italian jeweller shooting higher.

This immediately prompted a denial yesterday from Swatch that it was about to launch a bid for the Italian company. Bulgari's controlling family shareholders also said they were not interested in selling out.

The Hayeks have never been particularly big spenders, and Swatch has proved more recession proof than its peers because of its clear focus on its comprehensive range of 19 or so different watch brands. Indeed, it has been its cheaper middle to low brand watches that have continued to hold up well in the downturn offsetting the slump in the top end of the watch market.

The question for Swatch is not so much whether it feels the time has come for a little diversification but rather if it thinks it still needs to fill a gap in its already extensive range of watch brands.

european.view@ft.com

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