FEBRUARY 18, 2005

Ferrari up for sale?

The news that Fiat is to take over Ferrari's Maserati business in order to link it to Alfa Romeo has led to intense speculation in Italy that the company could be on the verge of selling off Ferrari.

The news that Fiat is to take over Ferrari's Maserati business in order to link it to Alfa Romeo has led to intense speculation in Italy that the company could be on the verge of selling off Ferrari. Until the last few days, Fiat has been unable to do very much because of the problem with General Motors but the deal agreed on February 13 for the two companies to go their separate ways has opened the doors to change.

"This move should be seen as the first of a new era," Alessandro Frigerio, a fund manager at Pigoli Consulenza in Milan told The Detroit News. "Fiat had their hands tied with GM. The moment they could act, they did. The next step could be selling Ferrari shares."

At the moment Fiat owns 56% of the shares in Ferrari. Mediobanca, Italy's largest investment bank, owns 15%, Commerzbank AG owns 10%, Lehman Brothers owns 6.5% and an additional two percent belong to other banks. In addition the Ferrari Family owns 10% of the business. Ferrari had planned a stock market flotation back in 2002 when the shares were sold but that was called off because of adverse market conditions. With the Fiat group in deep debt, the sale of Ferrari might now go ahead. This will make it even more difficult for the company to fund a Formula 1 programme as it will no longer be able to spend all of its profits on F1, as has been the case in the past.