AMG
17-02-2005, 12:38 PM
Fiat SpA announced Wednesday it's buying the Maserati sports car brand and business from Ferrari, a company in which Fiat already owns a majority stake. The deal is being done to meld Maserati and Fiat's underperforming Alfa Romeo unit, and also probably to liberate Maserati from Ferrari in advance of a stock listing of the Italian performance car company.
Terms of the deal have not yet been disclosed. Fiat just agreed to take $2 billion from General Motors in exchange for not exercising a put option that would have required GM to buy the 90 percent of Fiat Auto it didn't already own. This deal could not have been done before the deal with GM.
Fiat's struggling carmaking unit owns the Fiat, Alfa Romeo and Lancia brands. The Fiat group also owns a 56 percent stake in Ferrari.
"This operation is essential for the future development of Alfa Romeo," said Fiat Chief Executive Sergio Marchionne.
Fiat is interested in expanding both the Alfa Romeo and Maserati businesses globally. Last year, Fiat hired former BMW marketing executive and Rolls Royce CEO Karl-Heinz Kalbfell to run Alfa and put together a new business plan for the division. Alfa last year sold 180,000 cars, but it hasn't marketed in theU.S. since 1991. Maserati sold 4600 cars last year, but has targeted 10,000 a year with about a third of that designated for North America where it has restarted distribution.
It is likely that little cash is changing hands in the deal as the combination benefits both Ferrari and Fiat. Fiat posted an operating loss of $1.3 billion in 2003, and is expected to post a $1 billion-plus loss for 2004. Since 2000, Fiat has posted net losses in excess of $14 billion. In 1990, Fiat ranked second to Volkswagen in Europe, with sales of 1.9 million cars and a 13.8-percent share. But the $27 billion company is now Europe's weakest automaker, with sales in 2004 falling to 1 million-nearly half the level of 15 years ago-and European market share of about 7.6 percent. Quality problems and a loss of its protected home market where Japanese and Korean brands have been winning over customers have generated the problems.
The Ferrari brand is viewed as very valuable, and Fiat stands to make out financially if the company sells shares to the public. The company is set to introduce the F430 Spider next month in Geneva. That car features a new 4.3-liter V-8 that produces 483 horsepower and 343 pound-feet of torque-88 more horsepower and 68 additional pound-feet than the 3.6-liter engine found in its predecessor, the 360 Spider. Paired with a Formula 1-derived gearbox that Ferrari says shifts gears in 150 milliseconds, the compact V-8 propels the F430 Spider from 0 to 62 mph in roughly 4.1 seconds and to a top speed in excess of 193 mph, according to Ferrari.
Terms of the deal have not yet been disclosed. Fiat just agreed to take $2 billion from General Motors in exchange for not exercising a put option that would have required GM to buy the 90 percent of Fiat Auto it didn't already own. This deal could not have been done before the deal with GM.
Fiat's struggling carmaking unit owns the Fiat, Alfa Romeo and Lancia brands. The Fiat group also owns a 56 percent stake in Ferrari.
"This operation is essential for the future development of Alfa Romeo," said Fiat Chief Executive Sergio Marchionne.
Fiat is interested in expanding both the Alfa Romeo and Maserati businesses globally. Last year, Fiat hired former BMW marketing executive and Rolls Royce CEO Karl-Heinz Kalbfell to run Alfa and put together a new business plan for the division. Alfa last year sold 180,000 cars, but it hasn't marketed in theU.S. since 1991. Maserati sold 4600 cars last year, but has targeted 10,000 a year with about a third of that designated for North America where it has restarted distribution.
It is likely that little cash is changing hands in the deal as the combination benefits both Ferrari and Fiat. Fiat posted an operating loss of $1.3 billion in 2003, and is expected to post a $1 billion-plus loss for 2004. Since 2000, Fiat has posted net losses in excess of $14 billion. In 1990, Fiat ranked second to Volkswagen in Europe, with sales of 1.9 million cars and a 13.8-percent share. But the $27 billion company is now Europe's weakest automaker, with sales in 2004 falling to 1 million-nearly half the level of 15 years ago-and European market share of about 7.6 percent. Quality problems and a loss of its protected home market where Japanese and Korean brands have been winning over customers have generated the problems.
The Ferrari brand is viewed as very valuable, and Fiat stands to make out financially if the company sells shares to the public. The company is set to introduce the F430 Spider next month in Geneva. That car features a new 4.3-liter V-8 that produces 483 horsepower and 343 pound-feet of torque-88 more horsepower and 68 additional pound-feet than the 3.6-liter engine found in its predecessor, the 360 Spider. Paired with a Formula 1-derived gearbox that Ferrari says shifts gears in 150 milliseconds, the compact V-8 propels the F430 Spider from 0 to 62 mph in roughly 4.1 seconds and to a top speed in excess of 193 mph, according to Ferrari.