Irving family moving to break up empire: report

The Irving family is moving to break up its business empire, according toa report in the Globe and Mail.

Thestory inWednesday's business section cites unnamed sources familiar with the Irving companies and says there is tension among the family over the restructuring.

The $6-billion business empire has interests in forestry, retail, trucking, media and energy.

Established in Bouctouche, N.B., with the opening of a single sawmill in 1882, the Irvings now hold Canada's third-largest fortune.

The restructuring was hinted at on Tuesday, when J.K. Irving was the sole family memberattending a lunch in Toronto to announce the family's induction into the Canadian Business Hall of Fame.

In an interview, J.K. Irving confirmed that the structure of the family empire is evolving, but he wouldn'texplain further, says the Globe and Mail.

The newspaper report suggests the restructuring wouldseparate the Irvings' energy holdingsfrom its forestry business.

Three brothers, J.K., Arthur and Jack, are the principal owners of the Irving empire, and five younger Irvings are also now working in the business.

The Irving companies have been informally broken up into two basic units for several years.

Arthur's eldest son Kenneth Irving now runs Irving Oil. Forestry, trucking and manufacturing company JD Irving Ltd. is run by J.K.'s eldest son Jim.

The breakup of the Irving companies is inevitable, said Harvey Sawler, author of 21st Century Irvings. There are vast differences between the two main pillars of the business forestry and energy, he said.

But ensuring the other children in the Irving empire are happy with their place in the organization is the current issue, according to the article in the Globe and Mail.

"They would very much want to keep things very muted; even if there is any acrimony going on they would endeavour to keep things low key until such time as there is no acrimony," Sawler said.

Most family empires go through succession problems by the third generation, said Barry Boothman, a business professor at the University of New Brunswick.

"All family empires ultimately do hit the point, as you move forward into subsequent generations of disputes among the heirs, about what they want or how much they should get," Boothman said.

"The real issue may be how much we have of the family doing active direction and management of the firm as opposed to having it managed by professional managers on behalf of the family."

Irving officials have not commented on the report.