Fiat Chrysler Automobiles NV’s spin-off, Ferrari SpA, is about to file for an initial public offering according to FCA’s Chief Executive Officer, Sergio Marchionne.
He told reporters at the Toronto Global Forum held on July 8-10 in Canada that they are only days away from filing the documents.
Fiat Chrysler is spinning off Ferrari to fund a $53 billion investment program set to focus on the global expansion of brands such as the Jeep, Alfa Romeo and Maserati. According to people with knowledge of the matter, Ferrari has picked the UBS Group AG to help manage its IPO in New York later this year. Sources added that JPMorgan Chase & Co. and Goldman Sachs Group will also play an important role in selling to investors 10% of Ferrari’s shares.
While Marchionne refused to say if UBS would manage the IPO, he added that Fiat Chrysler might consider a secondary listing for Ferrari, possibly in Milan, Italy. The CEO stated that FCA is not looking to make a hostile bid for General Motors Corporation, as he wants to achieve a level of consolidation as the industry’s profitability even in peak years is not generating enough returns to cover the investment costs. Potential partners including GM and the Ford Motor Corporation have expressed their lack of interest.
Marchionne also stated that he is expecting the Ferrari unit to be valued at over €10 billion, which represents around 60% of the parent company’s market value. While profit growth is the only prospect Marchionne is looking forward to in order to have enough money to produce the next generation of cars and technologies, the option to share the costs by merging with another automakers seems unlikely despite his efforts to do so.