Fiat Shares Boosted to Six-Month High After Ferrari Spinoff Announcement

Fiat Chrysler announced today that it will separate Ferrari from the rest of its automotive group. That means you could own a portion of Ferrari as soon as next year when shares of the luxury sports-car brand become available.

The 100-plus-year-old automaker, which took full control of Chrysler and became FCA earlier this year, first bought a portion of Ferrari 45 years ago. Since then, the marque has flourished as the jewel in Fiat’s automotive crown under the auspices of the well-liked CEO Sergio Marchionne.

The separation will allow Ferrari to offer its own publicly traded shares: 90 percent to Fiat shareholders including the Agnelli family, which still controls 30% of FCA shares, and the rest to everyone else. (Piero Ferrari, who is the son of Ferrari founder Enzo Ferrari, still owns a minority stake in Ferrari as well.) The spinoff comes as FCA attempts to raise roughly $4.7 billion to address mounting debt. In return, Ferrari's new independent status will enable it to operate more nimbly in a rocky economic environment.

Shares at Fiat rose more than 18 percent to a six-month high Wednesday after the news.

A Chief Leaves

John Elkann, Chairman of Fiat-Chrysler and grandson of the famous Fiat chief Gianni Agnelli, said he was "delighted" about the change: This decision will "preserve the cherished Italian heritage unique position of the Ferrari business," he said in a press statement today. “It represents FCA’s best course of action to support the long term success of the Group while at the same time substantially strengthening FCA’s capital base.”

News came after last month’s announcement at the Paris Motor Show that Luca di Montezemolo, Ferrari’s charismatic chief, would leave after 23 years at the helm. Days prior to his departure rumors had circulated that it was due to his disagreement with an impending sale of Ferrari. Others said it was more about his intense displeasure about Ferrari’s recently faltering standings in Formula 1.

Ferrari drivers are not expected to win this year; the team hasn’t won a Formula 1 title since 2008.

“We’ve not been as successful as we wanted to be, but there are always ups and downs, and now is the time for us to be going up again,” Montezemolo, 67, said in Paris. He went on to call Ferrari an “American” company now and said it had come to the end of its purest era.

“Life is strange. Life makes surprises. It’s important for us to look ahead,” he said when a reporter asked if there was any truth to reports about an acrimonious departure. The only F1 race to be held in the United States this year will be this Sunday in Austin, Texas.

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