Ferrari and FCA Officially Parted Their Ways

BANGKOK: Ferrari has become a stand-alone company from 3rd January after Ferrari and Fiat Chrysler Automobiles (FCA) officially parted their ways marking the end of FCA major stakes, which were bought back in 1969. The Italian supercar maker, popular for its Formula one racing cars, got separated from Fiat Chrysler Automobiles to accelerate the profitability and revenues of the company as a standalone unit. After the separation, Ferrari is also likely to launch the Facelift of Ferrari FF at the Geneva Motor Show this year.

FCA on separation sold the remaining 80% of its Ferrari shares to the shareholders. 10% of Ferrari shares were earlier sold by FCA in an IPO, Initial Public offering in October. Investors will get one share of Ferrari stock for every 10 FCA shares they owned. They will also be entitled with one voting share for every 10 FCA shares on account of the system of loyalty scheme.

The controlling authority or leadership in the Ferrari does not change despite separation, as Agnelli family of Italy has now become the biggest shareholder in Ferrari with 10% of stake in the company owned by Pierro Ferrari, Vice Chairman of the company. Chairman John Elkann of Agnelli family holds the largest stake in FCA and now he is also the biggest shareholder in Ferrari, so despite spinoff, the authority remains with the Agnelli Family only. Agnellis and Pierro also own just under 49% of Ferrari's voting rights.

Moving out from under the parent company FCA after 47 years, the Italian giant supercar maker was listed on the New York Stock Exchange last year. It also made its debut on Borsa Italiana with the suspension of its shares after dipping to €41.75 before opening at a price of €43, though it was opened again later on. For FCA, the first day of Milan trade was even worse than the Ferrari where it lost around one-third of its value.

The split was part of the strategic plan FCA CEO and Ferrari Chairman, Sergio Marchionne to lift the supercar maker as a luxury goods maker and boost its value and revenue to bring it parallel to other luxury brands such as Hugo Boss, Hermes and Prada.

From the spin-off, FCA is entitled to get $4 billion with which it can clear its high level of debt and also investors will get a clear assessment of FCA. Last year also, Fiat Chrysler Automobiles had bought emissions credits from Tesla, Honda and Toyota. Tesla has also bagged the award “Car of the year” award for its Model S sedan and is among the world’s best environment-friendly cars. Fiat Chrysler Automobiles bought the 100% of Tesla's 2013 and 2014 emission credits and also 5.5 million of credits from Honda and Toyota when FCA was ranked last in Fuel efficiency ratings.

Also Read: Alfa Romeo planning to return to Formula One as a competitor to Ferrari

Featured Image Courtesy: Brent Snavely