Lazard And Mediobanca: Shocks To The System

Anyone with doubts that the days of Old World-style finance are passing needed only to take a look at recent goings-on at two legendary European investment banks, France's Lazard Freres & Co. and Italy's Mediobanca. Once all-but-unassailable, they now both face shareholder revolts, internal power struggles, defections, and forced restructuring of their labyrinthine organizations. And all this is happening under a media microscope that has given the public a closer view than ever before of these historically powerful, secretive institutions.

For most of the post-World War II era, Lazard and Mediobanca have exemplified European high finance. Through their carnets d'adresses--their connections--they masterminded corporate mergers, advised their governments on the disposal of state-owned companies, and helped protect national champions from foreign marauders. And they have a shared history--though the Lazard group, whose origins go back 150 years, has long been a global player, while Mediobanca's arena was Italy. Andre Meyer, who ran Lazard after the war, and Enrico Cuccia, Mediobanca's founder, were allies and pioneers in modern financial engineering. In 1956, Lazard took a stake in Mediobanca. That connection is also unraveling now.