Fiat to spin off Ferrari
Fiat Chrysler Automobiles is parting ways with its high-end subsidiary brand Ferrari.
The global auto giant announced in London on Wednesday that it will hold a public stock offering to sell off 10% of the legendary Italian marque and distribute the remaining 90% of the company to its current shareholders.
The shares will be listed on a U.S. exchange and possibly a European exchange, the company said.
Fiat, which acquired Ferrari in 1969, had been expected to do something with its racing-red luxury division. Last month, following reports of division in upper management, Ferrari’s longtime chief executive and chairman, Luca de Montezemolo, left the company after a 23-year run. He was succeeded by Sergio Marchionne, CEO of parent company Fiat.
The two men were said to have clashed over Ferrari’s relatively poor performance on the race circuit and over their differing visions for Ferrari’s future.
Analysts foresaw a new day for the storied luxury label, one that might include more down-market or affordable Ferraris.
This move may resolve that issue.
“I am delighted to have taken this additional step in the development of FCA,†said parent company Chairman John Elkann. “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.â€
Fiat Chrysler, a combination of the Italian and American sides of the two historic brands, was formed in January and began trading on the New York Stock Exchange on Oct. 13.
The world’s seventh-largest automobile maker, Fiat reported pre-tax third quarter earnings of $1.18 billion, up 7% from its performance a year earlier.
Fiat shares climbed 12% on the spinoff news in early trading.
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