Margarita Louis-Dreyfus: guarding a legacy
The LDC chair says safety lies in a shareholder supermajority
The French press portrays Margarita Louis-Dreyfus as a mysterious Russian at war with a business dynasty; the orphan from Leningrad who married into wealth and took control of a venerable domestic company.
Her route from circuit board seller in the former Soviet Union to the chair of Louis Dreyfus Company (LDC), one of the world’s top commodity trading houses, is certainly remarkable. It is also one the 54-year-old says has been distorted by the media during wrangles with her late husband’s family.
“Robert asked me to do this,” she says of the businessman and scion of the Dreyfus grain-trading empire, who died nearly eight years ago. “I am a guardian of the company’s interests.”
It is a point Ms Louis-Dreyfus will repeat many times during a 70-minute interview at a hotel in Switzerland, the country in which she now lives.
LDC, whose rivals include Archer Daniels Midland and Cargill, was founded in 1851 by Léopold Louis-Dreyfus, a French grain trader. It made $55bn in revenues in 2015 and claims to handle about 10 per cent of global food flows.
For the past 18 months, Ms Louis-Dreyfus has been at loggerheads with members of the Dreyfus clan, including two of Robert’s sisters.
Having watched their sister-in-law take an increasingly active role in the private family business, they have exercised a clause in a shareholder agreement that forces Ms Louis-Dreyfus to buy most of their remaining shares in the trading house’s parent, Louis Dreyfus Holding (LDH).
But they have clashed over how to value the stake, which could be worth up to $1bn, and are now in arbitration. It’s unclear how Ms Louis-Dreyfus will finance the buyout.
“I’m a settler by character, a diplomat, I’m always looking for that option and I would love to have a solution, a quick solution and settlement,” Ms-Louis-Dreyfus says of the dispute. “It just has to make sense for the company.”
Born in 1962, Margarita Bogdanova was orphaned at the age of 11 when her parents died in a train accident. Raised by her grandfather in Leningrad (now St Petersburg), she graduated with a diploma in accounting from the local school of commerce.
She met Robert, the great grandson of Léopold, in 1988 on a flight between Zurich and New York. They married three years later and had three sons.
A turnaround expert who owned Olympique de Marseille, the French football club, Robert had a successful career running Adidas and Saatchi & Saatchi. In 2006, at the age of 60, he returned to the family business and set about restructuring the company.
Robert’s death in 2009 thrust Ms
Louis-Dreyfus into the spotlight. At the time she lacked not only experience in grain trading but also in business. Today she appears to be firmly in control.
These are difficult times for the agricultural industry. Bumper harvests and overflowing stocks have cut into earnings at LDC and the handful of companies that dominate global flows of crops and staple foods.
To revive its fortunes LDC has been seeking partners for its noncore dairy, metals, fertiliser and orange juice units to help finance its expansion and growth.
Progress has been slow but Ms Louis-Dreyfus says it important to find the right investor. “I prefer going step by step but not jumping,” she says. She sees her responsibilities as helping select the right senior executives for LDC and setting the company’s moral code.
She claims she does not interfere in the day-to-day running of the business. Reports that she has frequently clashed with executives are not correct, she adds. There have been four LDC chiefs since 2011 when Ms Louis-Dreyfus was appointed chair of the parent company.
She says just one was replaced during that time. The other two were interim appointments. “I don’t run the company,” she says. “It’s management who are running the company.”
In Gonzalo Ramírez Martiarena, the Argentine national who runs LDC, Ms Louis-Dreyfus says she now has a CEO who shares her long-term vision.
On leadership, she says she learnt the importance of teamwork after watching five of the best doctors in the world try to keep Robert’s cancer at bay. “There is no one person who knows everything. There is always a team.”
Ms Louis-Dreyfus, who last year gave birth to twins with her partner, Philipp Hildebrand, former chairman of the Swiss National Bank, says her objectives for the company are simple: keep the business safe, focus on the long term and set an example for employees.
The first two have been achieved, she says. Using the shareholder pact, Ms Louis-Dreyfus has been able to increase her stake in the holding company that controls LDC to 80 per cent from 65. That will rise to 96 per cent once the buyout of the family shareholders is completed.
“A family company needs to have one shareholder with a supermajority,” she says. “It ensures the orientation of the company is on long-term development as opposed to short-term gain, and the interests of the business are supported in one united voice.”
She has attempted to address the other objective through the Louis Dreyfus Foundation, a charity she set up in 2013 to help foster sustainable farming.
Ms Louis-Dreyfus insists she will have no trouble buying back the family stake. Even if a settlement were to be reached tomorrow, she says there would be plenty of time to fund the transaction because of the way the shareholder agreement is structured.
Asked if she has been tempted to sell LDC, Ms Louis-Dreyfus says she has not.
“When Robert was dying, we spoke a lot about the company, to the extent it almost felt like Dreyfus became our fourth child,” she says. “I fully committed to safeguarding his heritage and building a long-term future.”