JUNE 29, 2002

The sale of Ferrari

FIAT has sold 34% of the Ferrari company to the Italian bank Mediobanca for $768m. The bank, which has gazumped a syndicate of banks which were underwriting the flotation of the business, says it will sell its shareholding to the public in the summer of next year. Before that happens, however, the bank will sell a part of its stake to other unnamed Italian banking organizations.

All these financial dealings will have no effect on the running of the company as Fiat will retain a majority shareholding of around 56%. The remaining shares are held by the Ferrari Family (10%). The deal values the company at $2.4bn, which is rather more than was thought. Most analysts reckons that the firm is worth about $1.4bn and there is much mystery surrounding why the deal has been done and what effects it could have on the company in the future.

Ferrari boss Luca di Montezemolo told reporters that he is now considering whether or not he wishes to stay in charge of the company and continue his task of building up Maserati and the Ferrari brand. Montezemolo told reporters that he had not been told about the deal before it happened - which is not a good sign. The contracts will be signed within a couple of days.

Montezemolo remained upbeat as he unveiled a new Ferrari model called the Enzo, a limited edition model, built of carbon composite material, which will sell for $700,000.

"Montezemolo is not leaving Ferrari," told reporters. "It's just a moment for reflections. Enthusiasm and devotion for the company are unchanged. We are ready for new challenges."

The challenges ahead are mainly related to Maserati as Montezemolo does not want to produce more Ferraris because to do so would dilute the brand but exploiting the Ferrari brand more successfully is also part of the future strategy of the company.