Decline of an Argentine dynasty

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Decline of an Argentine dynasty

Many of South America's business families are weary. They have survived wars, military dictatorships and debt crises but the arrival of foreign competition is proving the final blow. Lacking an heir both willing and able to take on the modernization task, they are selling out - often to private equity funds in deals brokered by corporate financiers. The latest to start the process is Bunge International, the giant soyabean to branded foods conglomerate, started by European immigrants to Argentina at the end of the last century. So far it's been a painful retreat in which shareholder disputes long hindering Bunge's performance have carried on over a recent asset sale.

The fourth generation of Bunge's family shareholders are a talented lot. They went to the best schools, have a stack of qualifications and are climbing the ladder in tough and demanding professions. Some work for Wall Street investment banks. Yet not one among them has come forward as a candidate to take Bunge - an international grain and oilseed trader with a gross annual turnover of $13 billion - into the next century.

Why? Because the depth of management prowess needed to modernize an old-fashioned conglomerate like Bunge and make it compete against the world's leading multinationals is beyond the wit of all but a few superhuman individuals - such as Bill Gates, Jack Welch or Lee Iacocca. The chances of spawning one of these in a family dynasty are remote.

That's not the only problem. Messrs Gates and Welch may have challenges aplenty but they don't have to deal with feuding shareholders of their own flesh and blood or with individualistic executives who unwisely get the firm involved in Argentine politics. They haven't had to move the company headquarters from Buenos Aires to São Paulo following the kidnapping of key family members, and when they commission a consultant's study of the business it doesn't wind up starting a family row.

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