Fiat Chrysler Automobiles NV intends to spin off Ferrari. This step is to give the luxury sports-car manufacturer independence from its less-profitable parent company.
The Chief Executive Officer of the company, Sergio Marchionne, said in a statement, cited by the Financial Times: “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.” Mr. Marchionne also said: “The Board supports managements determination that this transaction represents FCAs best course of action to support the long term success of the Group while at the same time substantially strengthening FCAs capital base.”
Fiat announced today it is to sell 10% of its shares in Ferrari. The remaining 90% stake will be given to the companys own shareholders. According to the companys statement, the spin-off is expected to be finalized in 2015. Fiat also explained that Ferraris shares will be listed in the U.S. and probably in Europe, after the separation is complete.
The announcement comes a bit more than a month after Mr. Luca Cordero di Montezemolo stepped down from the position of Chairman after spending more than two decades in the company. As reported by some people with knowledge of the situation, Mr. Montezemolo had long opposed the separation of the Ferrari brand from its parent company.
Fiat also reported lower third-quarter net profit, as its growth in regions such as North America and Asia-Pacific was neutralized by losses in Europe. As revealed by the company, its net profit over the third financial quarter amounted to €188 million in comparison with €189 million, reported during the same period a year earlier. Fiat said that its revenue increased by 12% to €23.55 billion.
In addition, the year-end forecast of the company was confirmed. Fiat projects a revenue of about €93 billion and a net profit within the range of €600 to €800 million. The company also said that it expects its operating profit excluding one-time items to be within €3.6 billion to €4 billion, while its net industrial debt is expected to be in the range of €9.8 billion to €10.3 billion.
Fiat Chrysler Automobiles NV added 11.80% to trade at €8.53 per share as of 15:30 GMT, marking a one-year increase of 46.23%.
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