Societe Generale : De Benedetti and Rivals for Belgian Firm Near Pact

From Reuters

Italian tycoon Carlo De Benedetti is near to agreeing on a peace pact in his six-month battle for control of Societe Generale de Belgique, Belgium’s biggest company, a top official of the company said Tuesday.

“There’s an accord which has to be approved in legal form,” Societe Generale director Etienne Davignon told a news conference at a stockholders’ meeting.

Earlier this year, a group of powerful French and Belgian financial institutions blocked De Benedetti from gaining control over Societe Generale de Belgique, a pillar of the country’s establishment with interests in 1,300 companies worldwide.

But De Benedetti said he would not give up his plan to turn the 166-year-old firm into a pan-European holding company.


He and his rivals--a group headed by Paris-based Compagnie Financiere de Suez--are now working on a plan to run Societe General together. Details were meager but should be announced on Friday, when the agreement is expected to be completed.

Meanwhile, Societe Generale’s board chose French banker Herve de Carmoy to fill the yet-to-be-created position of managing director as part of a major restructuring.

And Societe Generale governor Rene Lamy told shareholders that the group aimed to double its profit--criticized by De Benedetti as modest--between 1987 and 1990.

Breakthrough at 11th Hour


De Benedetti launched his bid for Societe Generale in January, and the battle for control of the giant holding company, eight years older than Belgium itself, quickly became a hot political issue.

But the huge amounts of Societe Generale shares that he and his allies purchased--45% in all--were not enough.

The French and Belgian group led by Suez eventually built up a 55% stake.

Eleventh-hour talks ahead of Tuesday’s meeting brought a breakthrough toward ending the battle. Suez president Renaud de la Geniere told the gathering that the two camps were negotiating an accord to run Societe Generale efficiently and permit it to develop further.

“They are convinced they will reach (it) soon,” he said on behalf of both sides.

Davignon said another shareholders’ meeting would be held as soon as possible after the agreement was finalized so that De Benedetti and his allies could be elected to the board.

The new meeting would also vote on a change to Societe Generale’s statutes to create the post of managing director.

The Suez-led consortium prevented De Benedetti and his partners from joining the board at the April meeting while taking 12 of the 23 seats themselves.


De Benedetti himself stuck to earlier plans to stay away from Tuesday’s meeting, a boycott intended to protest De Carmoy’s election to Societe Generale’s board.

De Carmoy, 51, was until last month chief executive for global banking at Britain’s Midland Bank.

Societe Generale officials made clear that he would get the new job of managing director once the statutes had been changed.

The change was not possible without De Benedetti’s support because it needs to be approved by 75% of the shareholders.

Stakes ‘Considerable’

De Carmoy will share some responsibility for the day-to-day running of Societe Generale with Lamy, whose position has until now been all powerful.

De Carmoy told a news conference that he aimed to make the Generale a European leader.

“The stakes are considerable. It’s a case of taking all measures which will allow this group, in the future even more than today, to be a European industrial center of excellence with a world vocation,” he said.


His statement seemed likely to please Suez and De Benedetti, both of whom have said they want to improve the Generale’s profitability and turn it into a pan-European holding company.

Societe Generale had mixed results last year. Net profit for the group as a whole increased 13.6% to 10.77 billion francs ($300 million), but profit for the parent firm dropped 22.1% to 4.14 billion francs ($115 million).