Ferrero controls Ferrero Group, the world's second-largest chocolate maker. The Alba, Italy-based business sells Ferrero Rocher chocolates, Nutella spread, Tic Tac mints and other confections in more than 170 countries. The company is owned by several family members and had revenue of 10.7 billion euros ($11.9 billion) in 2018.
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The Ferrero fortune is derived from closely held Ferrero SpA, the second-largest chocolate maker in the world, according to the International Cocoa Organization's website. The business is controlled through the Luxembourg-based holding company Ferrero International. The Alba, Italy-based confectionery sells candy in more than 170 countries and had revenue of 10.7 billion euros ($11.9 billion) in the year ended August 2018, according to its website.
The company is valued based on the average enterprise value-to-Ebit and enterprise value-to-Ebitda multiples of three publicly traded peer companies: Hershey, Nestle and Mondelez.
Michele Ferrero, the billionaire's late father, handed control of the business to his two sons in 1997. Giovanni Ferrero became the sole chief executive when his brother, Pietro, died in 2011. The company announced in March 2017 that Giovanni would step down as CEO on Sept. 1, 2017 and become executive chairman. He's the highest-ranking family member at Ferrero and is a board member and shareholder of the family holding company.
Cash and other assets are based on an analysis of dividends, market performance, insider transactions, taxes and charitable contributions. They also include loans issued from the Ferrero family to their Luxembourg-based holding company. The calculation of cash holdings was updated in July 2019 to include these loans and additional dividends as disclosed in corporate filings and this led to an increase in the valuation of more than $3 billion.
Raoul Romoli Venutri, a spokesman for Ferrero, declined to comment on the net worth calculation.
Giovanni Ferrero was born in September 1964 in Farigliano, Italy, the son of Michele and Maria Franca Ferrero. His paternal grandparents opened a sweets shop in Alba, Italy, during World War II, and with his great uncle founded Ferrero in 1946. The family later transformed the northern Italy pastry shop into a confectionery factory.
His great uncle, Giovanni, built a national distribution network. By 1954 he had turned the brand into a household name throughout Italy, according to its 2008 corporate social responsibility report. Michele Ferrero joined the family business in 1950 and took over seven years later when Giovanni died. He handed leadership of the company to his two sons, Giovanni and Pietro, in 1997. He later passed them majority control of the family's Luxembourg-based holding company. The billionaire was named sole CEO after his brother died in a bicycle accident in South Africa in 2011. Michele, who was Italy's richest person, died in February 2015.
Nutella chocolate spread was created in 1964 and Kinder Chocolate in 1968. Their popularity helped the company expand in Europe and then, in the U.S., in 1969. By the 1980s, the company had operations on five continents.