Alfa Romeo, Maserati spinoff back in the spotlight

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2018 Alfa Romeo Stelvio

2018 Alfa Romeo Stelvio

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Late last year, talk of Fiat Chrysler Automobiles spinning off its upmarket Alfa Romeo and Maserati brands emerged in investor circles.

The thinking was that the money raised could eliminate FCA’s debts of around $7 billion and thus improve the company’s credit rating and better prepare it to weather any downturn. Offloading Alfa Romeo and Maserati would also allow FCA to focus on its more successful units such as Jeep and Ram.

People familiar with FCA’s dealings have since revealed to Bloomberg that the automaker is considering spinning off Alfa Romeo and Maserati as well as several supplier divisions, one of which is Magneti Marelli. Bloomberg estimates the two car brands could be worth a combined $8.3 billion and the supplier divisions an additional $5.9 billion.

2018 Maserati Ghibli

2018 Maserati Ghibli

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FCA spun off a commercial vehicles unit, CNH Industrial, in 2011. And in 2015 the automaker spun off Ferrari though most of the shares were retained by FCA’s controlling shareholder, the Agnelli family-led Exor.

According to Bloomberg’s sources, the leaner, debt-free FCA would be more attractive for a potential merger or takeover. CEO Sergio Marchionne has been—quite publicly—seeking a potential merger partner or buyer for the past several years. And only this month there were reports a Chinese automaker had made a bid but was rejected, thought to be Great Wall.

Both Alfa Romeo and Maserati will require billions to add new models as well as technologies such as vehicle electrification and self-driving systems. An alternative to spinning off the brands could be finding a partner to share development costs, Bloomberg’s sources said. The sources also said a decision could come in early 2018.

 
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