Fiat Chrysler spins off Ferrari
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Fiat Chrysler Automobiles (FCA), the Italian-American auto company that owns the Fiat, Chrysler, Dodge, Jeep, Alfa Romeo, and Maserati brands has decided to spin off its most famous marque, luxury sports car maker Ferrari as a separate company. FCA has announced the separation of Ferrari S.p.A. via a public offering worth 10 percent of Ferrari’s outstanding shares, with the remaining shares distributed to FCA shareholders. Ferrari shares will then be listed in the United States and possibly a European exchange.
FCA CEO Sergio Marchionne said, “Following our acquisition of the minority interest in Chrysler earlier this year, the transformation of Fiat and Chrysler into FCA was completed earlier this month with our debut on the New York Stock Exchange. 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 was not immediate apparent who will get the voting rights in the new entity and if another automaker can initiate a takeover. Probably referring to the Volkswagen group, Marchionne reportedly said that he intends to keep Ferrari exclusive from “the people on the other side of the Alps.” VW chairman Ferdinand Piech has acquired several exotic sports car brands including Porsche, Lamborghini and Bugatti, and has previously been interested in Alfa Romeo.
The plan for Ferrari may be to increase production beyond 10,000 units per year from the present cap of 7000 cars. Exiting Ferrari chairman Luca de Montezemolo was reportedly against such plans, and plans to use Ferrari technology in the rest of the FCA lineup. He resigned after 23 years with the company.
Ferrari is reported to make as much as $100 million from licensing of its name alone, including operations selling merchandise at its stores worldwide. It likewise spends a similar amount running the Ferrari Formula One team, which has met with limited success this year, leading to the departure of world champion driver Fernando Alonso, presumably for McLaren-Honda next year.