Fiat has owned a sizable chunk of Ferrari for the past forty years -- but would the Italian auto giant surrender its stake in order to further its merger with Chrysler? According to new reports, Fiat CEO Sergio Marchionne suggested such a possibility during a recent meeting with financial analysts.
Automotive News reports Marchionne reportedly indicated during the meeting that the company was interested in selling off a number of its non-core assets. We learned earlier this year that the firm was moving to spin off its agricultural equipment and commercial vehicle operations, but it seems Fiat may also seek to remove itself from both auto supplier Magnetti Marelli and Ferrari S.p.A.
"We left Turin with the clear message that Fiat and Chrysler will become one company," a Morgan Stanley analyst wrote. "A Ferrari initial public offering and potential Marelli may need to come first, according to management."
A similar report from Credit Suisse suggested Fiat's 90-percent share in Ferrari could be valued at $3.3 billion. If part of that sum were recouped during a Ferrari IPO, Fiat could have the leverage to increase its stake in Chrysler. Currently, the company holds 20 percent of the Chrysler Group, but the automaker plans on increasing that total to 35 percent by the end of 2011. Credit Suisse suggests Fiat could own more than 50 percent of Chrysler by 2016, at the very latest.
Coincidently, Volkswagen Group chairman Ferdinand Piëch publically reiterated his interest in purchasing both Ferrari and Alfa Romeo from the Fiat Group. Piëch may have his chance with the former, but Fiat continues to insist Alfa isn't for sale. Oddly enough, analysts are split -- some reports from the conference suggest the brand will remain a key part of the Fiat empire, especially within the next five years, where the brand is expected to make a comeback in North America. Other reports, however, quote Marchionne as suggesting Alfa will only be sold for a "very high price."
Both companies have longstanding relationships with the Fiat Group. Fiat first bought into Enzo Ferrari's eponymous firm in 1969, when it purchased a 50-percent stake in the Modena-based automaker. Fiat didn't have much say in Alfa Romeo until 1986, when it purchased control of the company away from a state-owned Italian industrial consortium.
Is there life after Fiat? Could either Alfa Romeo or Ferrari flourish as part of the ever-expanding VW Group portfolio? We'll only know for certain once Fiat actually places either firm up for grabs, but until then, send us your best guesses to us by means of the comments section below.
Source: Automotive News (Subscription required)