Fiat Chrysler Automobiles had a bombshell announcement today, saying that it plans to spin-off performance carmaker Ferrari and sell off 10 percent of the Italian brand’s shares as part of its IPO, or initial public offering.
In prepared remarks, FCA CEO Sergio Marchionne said that as the company pushes forward in its 2014-18 Business Plan and “works towards maximizing the value of our businesses to our shareholders,” it would be just right that Fiat Chrysler Automobiles spun Ferrari off, thus making the Prancing Horse its own entity. According to FCA, it may list approximately 100 million shares worth a total of $2.5 billion on an unspecified American stock exchange, and may also list more shares on a European exchange. More information on the IPO will be revealed before the end of the year, while the IPO itself will take place next year.
As for the remaining 90 percent of shares, FCA said that these shares may likely be offered to current FCA shareholders, including the famous Agnelli family behind the Fiat marque. And as FCA had also released its third quarter financials today, it also confirmed that Ferrari earned a net revenue of 662 million Euros in the third calendar quarter of 2014 – that’s approximately $844 million USD.
In his own set of prepared remarks, FCA chairman John Elkann said that the move would allow Ferrari to become a more distinctly Italian automaker. “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,” he said.