JANUARY 3, 2003
Fiat and the future of Ferrari
The news that leveraged buyout expert Roberto Colaninno is lining up to take a run at the Fiat empire has boosted the value of the company but at the same time it has also raised questions about the future of some of the Fiat assets which would have to be sold off to pay for the rescue. One of these assets is the Ferrari Maserati company.
Ferrari is 56% owned by Fiat-related companies. Various investment banks own around 34% of the company while the Ferrari Family retain the remaining 10% of the firm. When Fiat sold the 34% to the banks it said that there would be no further sale of shares but things have moved on since then. One plan which has been discussed was to split Alfa Romeo off from the other Fiat car brands (Fiat, Lancia etc) and merge this into the Ferrari-Maserati group. This would create a successful luxury car company. The other brands could be sold under a "put" option which General Motors agreed to a couple of years ago when it acquired 20% of Fiat Auto for $2.4bn. The problem is that GM does not now want the company and says it will challenge the put option by way of an arbitration panel.
Colaninno's likely bid will also confuse the current engotiations which has been going on with Volkswagen about a possible merger of various luxury brands. Volkswagen owns the Lamborghini, Bugatti and Bentley names and there has been speculation that the company might become involved in a new group involving these and Fiat's Alfa Romeo, Ferrari and Maserati brands. This would create an impresive alliance of luxury products. The latest speculation before the Colannino bid was that Fiat would own the majority of this new company with the banks and the Ferrari Family reducing their involvement and Volkswagen coming in as a fourth shareholder.
But this is only one of the plans being discussed and so Ferrari's future - and its commitment to F1 - remains uncertain until more pieces of the jigsaw puzzle fall into place.
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