Ferrari to be separated from Fiat Chrysler
Ferrari, the world’s most powerful brand in 2013 according to leading brand valuation experts, Brand Finance, is set to separate from its parent company Fiat Chrysler Automobiles N.V. The latter, who own the 90 per cent of the Italian luxury sports car maker, will sell its 10 per cent share through a public offering, while the remaining Ferrari shares will be distributed to FCA shareholders. The Board of Directors of FCA confirmed listing its shares in New York and possibly in Europe.
FCA CEO Sergio Marchionne commented, “As we move forward to secure the 2014–2018 Business Plan and work toward maximizing the value of our businesses to our shareholders, it is proper that we pursue separate paths for FCA and Ferrari.” It is quite clear that the spin-off of the supercar brand, which is due to take place next year, is part of efforts to raise money for Fiat Chrysler’s 48 billion euro growth plans, including expanding its Jeep and Alfa Romeo brands. The company also has a five-year plan for increasing net income by five times by 2018.
John Elkann, Chairman of FCA responded to the developments, “I am delighted to have taken this additional step in the development of FCA. Coupled with the recent listing of FCA shares on the NYSE, the separation of Ferrari will preserve the cherished Italian heritage and unique position of the Ferrari business and allow FCA shareholders to continue to benefit from the substantial value inherent in this business.”
The decision for separation comes less than two months after a management transition at Ferrari that saw the longtime chairman Luca di Montezemolo stepped down from the role owing to the company’s poor on-track performance in Formula One. Earlier FCA reported a slightly lower-than-expected rise in third-quarter operating profit this year. The sell off is expected to end the long time relationship between the Italian car makers which has been an ongoing part of Fiat since 1969, when Fiat first acquired a 50 per cent stake. The spin-off of Ferrari is subject to customary regulatory approvals, tax and legal considerations, and other customary requirements. The remaining 10 per cent of Ferrari is owned by Piero Ferrari, vice chairman and son of the founder Enzo.
