Investors to receive one Ferrari share for every 10 FCA
The separation of Ferrari from Fiat Chrysler Automobiles NV will occur in the coming weeks, with investors receiving one share of the exotic car manufacturer for every 10 shares of Fiat Chrysler they own.
Additional details of the previously announced separation were released on Tuesday — two weeks ahead of the record date of the separation on Jan. 5. The spinoff will take place through a series of transactions that are expected to take effect between Jan. 1 and Jan. 3, according to the company. It follows Ferrari’s initial public offering on the New York Stock Exchange in October.
For NYSE investors, Fiat Chrysler’s 80 percent stake in Ferrari will be distributed to Fiat Chrysler shareholders and holders of certain convertible debt on Jan. 7. The last day for investors to purchase Fiat Chrysler common shares and receive Ferrari shares is Dec. 30, according to the company.
Fiat Chrysler added that its shareholders will also receive a cash payment of 0.01 euros for each share hold.
Fiat Chrysler sold a 10 percent stake in Ferrari last month on Wall Street, raising $893 million. Ferrari NV — the company’s name after the spinoff — will be controlled by Exor SpA, an Italy-based investment company controlled by the Agnelli family (Fiat Chrysler’s largest shareholder), and Piero Ferrari, founder Enzo Ferrari’s son, who retains a 10 percent stake in the company.
The spinoff of Ferrari was announced in October 2014 by Fiat Chrysler CEO Sergio Marchionne, who also serves as chairman of Ferrari, as a way to raise money for an ambitious five-year growth plan for the automaker and preserve Ferrari’s reputation. He plans to transform Ferrari into a luxury goods company.
Ferrari is among one of the most exclusive and recognizable brands in the world. It is focused on exclusivity (producing about 7,000 vehicles a year) and has an extremely loyal following of owners.
In 2014, approximately 60 percent of its 7,255 new cars shipped were sold to Ferrari owners and 34 percent were sold to those who own more than one Ferrari.
Ferrari generated nearly 2.8 billion euros (more than $3 billion) last year in revenue, and had a net profit of 265 million euros (about $300 million). Before interest and taxes, Ferrari made 389 million euros (more than $420 million).
Fiat Chrysler’s stock (NYSE: FCAU) was trading down by nearly 2 percent at $13.70 Tuesday afternoon while Ferrari’s stock (NYSE: RACE) was down 1.67 percent, trading at $46.62.