I want my baby back! Fiat to repurchase Ferrari shares
Fiat is increasing its stake in Ferrari, buying back the shares it sold to Italian investment bank Mediobanca during Fiat's financial troubles in 2002. The Turin-based auto conglomerate is the undisputed Don of the Italian car business, controlling Ferrari, Maserati, Alfa Romeo, Lancia, Iveco and Magneti Marelli (to name a few), and will exercise its option to buy back the 29% currently held by Mediobanca by the end of September.
Together with the 56% it currently holds, this will bring Fiat's stake in Ferrari up to 85%. Mediobanca sold 5% to Mubadala Development Company, a UAE crown corporation; shares which Fiat may or may not buy back. (Mubadala also owns stake in Spyker, fuelling rumors that the recently acquired Spyker MF1 team could switch to Ferrari power for next season.) The remaining 10% is still owned by the Ferrari family.
Enzo Ferrari initially sold half his company to Fiat in 1968. While ostensibly Fiat owns Ferrari, many would argue the control flows the other way, with Ferrari president Luca di Montezemolo serving as chairman of the Fiat Group.
Think buying one Ferrari is expensive? Fiat's purchase is rumored to cost a staggering $800 million.
[Source: Ansa.it via Italiaspeed]
Reader Comments (Page 1 of 1)
Michael Karesh 2:48PM (9/14/2006)
There's only one explanation for Fiat's good performance ever since the split with GM: GM got snowed. Sounds like they thought Fiat's problems were a lot worse than they actually were. Any intentional disinformation?
Reply
Whydrive 3:00PM (9/14/2006)
The actual explanation is that the Italian government bailed out Fiat. GM was smart in getting out of the Fiat deal.
Reply
Marco83 2:05AM (9/15/2006)
The only explanation is called Grande Punto....I'm not joking guys....the little Maserati-eyed car made the miracle...
Reply
Andy 3:41PM (9/14/2006)
Ferrari is one of the few bright spots in Italian motoring these days. Fiats and Lancias aren't well-known outside of Europe. Maserati is having to market itself as "cheaper than Bentley." GM was foolish to have gotten in bed with Fiat in the first place. The GM/Fiat business plan that would have forced GM to buyout the company was an example of bad management, a condition GM has suffered from for three decades.
Reply
GetReal 3:28PM (9/14/2006)
Whydrive,
your comment is absolute BS. The Italian government has absolutely nothing to do with the Fiat recovery. EU laws specifically forbid any such deal.
Fiat is doing better because they are building more cars that people want to buy - "it is the product, stupid!"
Reply
fizzandpop 3:34PM (9/14/2006)
#3 That $1billion from GM didn't hurt though. Staggering incompetence from GM. Good on FIAT, I would have loved to have been a fly on the wall when FIAT realized they'd pulled off that deal. Have they stopped laughing yet?
Reply
FredF 5:13AM (9/15/2006)
Fiat, and Alfa are building better cars... and people are buying them up! Travel the roads of Europe and you will see this is true for yourself.
Sure, $$ from GM was a big help, but Fiat is the only Euro car co. whose sales have gone up this year.
Reply
GetReal 3:00PM (9/15/2006)
#5
"GM was foolish to have gotten in bed with Fiat in the first place"
Let's not forget what GM got OUT of this deal: top-notch Fiat/Alfa Romeo light diesel engines, now also made BY GM in Germany. Opel owes it also to these engines if they are still competitive in Europe. How much is this worth?
Reply
tuning 4:20PM (9/18/2006)
GetReal, you're rigth.
Andy I agree that Ferrari is very known outside of Europe, but Alfa Romeo has it's market, tought.
Reply