Last October, we received the shock news that Fiat Chrysler Automobiles [NYSE:FCAU] was planning to spin off Ferrari, which this week FCA CEO Sergio Marchionne said he thought was worth “at least” $11 billion as a standalone firm.
Most of the new shares in Ferrari will end up in the hands of existing FCA shareholders, namely the Agnelli family-controlled Exor, with Ferrari founder Enzo Ferrari’s son Piero to retain his own 10 percent stake and the remainder, about 10 percent, sold to the public via an initial public offering.
Following the IPO, shares in Ferrari will list on the New York Stock Exchange. UBS is believed to be the investment bank set to lead the sale, likely to take place later this year.
2015 Maserati Ghibli
The deal will mean some much-needed funds for FCA, which will be able to further invest in brands like Alfa Romeo and Maserati as well as those of FCA US, which, as we’ve previously outlined, have the potential to earn much greater profits than Ferrari. And control of Ferrari will largely remain in the hands of FCA, given the planned ownership structure as well as the fact that Marchionne will likely remain chairman of the storied Italian brand.
The deal will also mean that Maserati will become FCA’s new flagship brand, the significance of which is clear to Marchionne.
“Maserati is very important,” he told Bloomberg. After the Ferrari spin off, “Maserati becomes the most coveted, exclusive brand that we have.”
Maserati Alfieri concept
However, Maserati still has a long road ahead of it before it will be anywhere close to having the power, prestige and profitability that Ferrari enjoys. And the brand has already hit some bumps. Maserati has a mid-term goal of 50,000 annual sales but already this year production needed to be curbed back after last year’s record 36,500 sales.
Through April, sales are down 9 percent to 7,306 units and first-quarter profits are down a substantial 39 percent to $40 million. The decline is thought to be due to a slowdown in China and increased discounts being made by dealers to move metal. There are some bright spots, though.
Early next year we’ll see the arrival of the much-hyped Levante, which will tap into the booming demand for luxury SUVs. And beyond the Levante we’ll see a new sports car based on the stunning Alfieri concept as well as a next-generation GranTurismo.