All Change for Italian Supercar Giant
Ferrari is to be separated from parent Fiat Chrysler in an effort to unlock value in the luxury brand and distinguish it from its mass-market owner.
Fiat Chrysler said that spinning off Ferrari was part of a plan to raise capital to support the recently merged car makers’ five-year plan to increase net income by five times by 2018.
CEO Sergio Marchionne said in a statement that it was “proper that we pursue separate paths for Fiat Chrysler Automobiles and Ferrari” following the completion of the merger of Chrysler and Fiat with a listing on the New York stock exchange earlier this month.
Dedicated fans of the famous brand will have the opportunity to own a real piece of the action when Fiat Chrysler sell 10% of Ferrari’s shares in a public offering, with the remaining 90% distributed to its own shareholders. The board intends to complete the move during 2015, and said shares would be listed in the US and with a possible double listing in Europe.
A Ferrari spin-off had long been speculated on by industry experts as Marchionne seeks to maximise values from the group’s various brands. However, Fiat Chrysler’s other luxury brands, including Alfa Romeo and Maserati, will remain part of the parent company.
The decision to break off Ferrari comes less than two months after an awkward management transition at Ferrari that saw the longtime chairman Luca di Montezemolo resign after a public spat over strategy with Marchionne, who has taken over as chairman of Ferrari. Marchionne has been vocal in his displeasure over Ferrari’s long absence from the Formula One car racing winner’s circle, and has pledged to get the team back to the top. The last time it won the driver’s championship was in 2007.