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Ferrari to separate from Fiat Chrysler

FCA will sell 10% of Ferrari's shares and distribute the rest among existing shareholders

Published: October 29, 2014, 4:55 PM
Updated: October 31, 2014, 3:35 AM

Ferrari LaFerrari

The Board of Directors of newly merged Fiat Chrysler Automobiles met for the first time today at its new headquarters in London and among the orders of business was the disposition of its crown jewel, Ferrari.

The exotic brand will be spun-off as its own company. The separation will be accomplished through a public offering of FCA’s interest in Ferrari equal to 10% of its outstanding shares, with the balance distributed among the existing FCA shareholders.

Announcement of the Ferrari spin-off comes within a month of FCA CEO Sergio Marchionne taking over the role of Ferrari chairman, following the very public ouster of the brand's long-time leader, Luca di Montezemolo.

The spin-off is expected to be completed next year, with Ferrari stock listed on the New York Stock Exchange and, possibly, a European market.

"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” said John Elkann, Chairman of FCA.

It will also help generate much-needed cash for FCA, which needs capital to realize its ambitious expansion plans for the 2015-2018 period. Those plans include the globalization of both the Alfa Romeo brands.

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,” Marchionne said.