Ferrari SpA Could Be Valued At Least $11 Billion in IPO: Marchionne


Ferrari SpA, the luxury sports car unit of Fiat Chrysler Automobiles NV (NYSE: FCAU) could be valued at least €10 billion ($11 billion) in an initial public offering (IPO), according to the company’s CEO Sergio Marchionne.

Fiat Chrysler to sell 10% stake in Ferrari

During the presentation of the new subcompact Fiat 500 in Turin Italy on Friday, Marchionne said, “There are clear expectations from ourselves as Ferrari brand is unique. There is also a scarcity value as we are just selling a 10 percent stake.”

Last year, Fiat Chrysler Automobiles said it would distribute 80% of its stake in Ferrari SpA to its shareholders, and it would offer its remaining 10% stake in the planned public offering.

The remaining 10% is owned by Piero Lardi Ferrari, the vice-chairman of Ferrari SpA. He is second and only living son of Enzo Ferrari, the founder of the luxury sports car manufacturer. He intends to keep his stake in the company.

Market observers believe that it is important for Marchionne to get the most from the Ferrari IPO because of his plan to increase the vehicles deliveries of Fiat Chrysler Automobiles to 7 million units by 2018. The automaker plans to invest €48 billion to achieve its goal.

Last month, Marchionne indicated that Ferrari SpA would trade its stock on the New York Stock Exchange (NYSE) as a Dutch holding company.  Its fiscal resident would be in the United Kingdom. Its public offering is scheduled on October 13.

According to Marchionne, Ferrari SpA would retain its operative unit in Italy and continue to pay its taxes in the country.  He explained that creating a Dutch Ferrari holding company demonstrates that “the world has changed and required capacity from countries to adapt.”

Fiat Chrysler Automobiles is operating its business using a multi-national structure.

Fiat Chrysler Automobiles’ stock and sales performance

Fiat Chrysler Automobiles reported that its vehicles sales in the United States increased 8% to 185,035 units in June. It’s the best June sales of the automaker since 2006.

The automaker sold 27, 217 vehicles in Canada and 147,000 vehicles in Italy, up by 1% and 14.35%, respectively.

The shares of Fiat Chrysler Automobiles closed $14.29 per share, down by 2.32% on July 2 in New York. The automaker’s stock traded between $8.54 and $17.08 per share over the past 52-week. Fiat Chrysler Automobiles gained more than 23% of stock value year-to-date. It has approximately $18.36 billion market capitalization.

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