Fiat Is Spinning Off Ferrari Into A Separate Company

Fiat Chrysler Automobiles has announced that it is to offer public shares in Ferrari, removing the supercar manufacturer from its portfolio into a separate company. 10 per cent of Prancing Horse shares will be made publicly available, with the remaining 90 per cent shared between FCA’s existing shareholders.

The news comes six weeks after Luca di Montezemolo stepped down from his position in charge of Ferrari, after disagreeing with the direction the company was heading. Rumours suggested one of the deciding factors, along with increased sales, was the fact Fiat wanted to split.

The break up is good news for Fiat, as its share price soared following the announcement. It recently revealed stagnant net profit for the third quarter of this year, making $188 million, down from $189 million for the same time last year. FCA also has a large amount of debt hanging over its head, so the sale of Ferrari shares allows it to raise a great deal of cash - it is targeting seven million car sales by 2018, up from 4.4 million in 2013, and is investing $60 billion to make this happen.

Sergio Marchionne, CEO of FCA, predicts that Ferrari could be worth as much as $10 billion. Shares will be made available next year, and will appear on American markets, as well as some potential European markets.