Want to own a part of Ferrari? Here’s your chance!
Fiat Chrysler Automobiles is to float one of the most popular, sought-after brands in the world of motoring – Ferrari, with an IPO valued to be worth $5.5 billion.
The company announced that Ferrari, which has set the benchmark in luxury high-performance vehicles, is to float the car manufacturer on the stock market, worth up to $5.5 billion.
Fiat Chrysler Automobiles, which has a massive 90 per cent stake in Ferrari, is to list ten per cent of its shares in the brand and distribute the remaining shares among its shareholders.
This huge sale of Ferrari is part of a wider plan to raise a significant amount of capital to fund a longer-term investment plan.
Sergio Marchionne, chief executive of Fiat Chrysler Automobiles, said that the time had come for both companies to part way. It comes on the back of Fiat and Chrysler merging together, which he noted as being “the end of a long historical cycle”.
“Today is a big clean-up,” Mr Marchionne continued. “It gives us the comfort to go and execute the plan up to 2018.”
There is a mood of positivity within Fiat Chrysler Automobiles, after it recently reported a return to profit in the third quarter. This has been boosted by a strong response to its luxury brands, with revenue gains being pronounced in Asia and North America.
John Elkann, chairman of Fiat Chrysler Automobiles, said: “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 the business.”
It is believed that this flotation is the exception, and that Fiat Chrysler Automobiles is not expected to sell off other luxury brands, the likes of which include Maserati and Alfa Romeo.
Analysing the move, the BBC’s business correspondent Theo Leggett said that one of the main reasons that this sale is taking place is to do with money – Fiat Chrysler Automobiles has ambitious expansion plans.
“The sale of a ten per cent stake on the stock market will allow Fiat to cash in on its investment,” he commented. “While ensuring enough of the company remains in Italian hands to head off any political protests about an Italian icon potentially falling into foreign hands.”