Earlier this week, rumors circulated of Volkswagen chairman, Ferdinand Piech would be interested in acquiring Fiat's Alfa Romeo brand and incorporating it into Volkswagen AG. When that information surfaced in the media, we were almost sure that the real object of desire for Piech is the high-end sports car brand, currently estimated between US $3.17 and $4.83 bn (GBP 1.96 – 2.99 bn; EUR 2.3 – 3.51 bn). With the German carmaker accumulating a large amount of cash, it is almost certain that the company will invest some of it.
Morgan Stanley analyst Stuart Pearson, who attended a recent analysts meeting, revealed to clients on Monday that Fiat is planning an initial public offering of Ferrari stock.
“We left Turin with the clear message that Fiat and Chrysler will become one company,” Pearson said. “A Ferrari initial public offering and potential Marelli disposal may need to come first, according to management.”
A Credit Suisse analyst was quoted as saying, “Marchionne identified a Ferrari initial public offering and Magneti Marelli disposal as potential sources of cash, without giving a timeframe.”
Marchionne plans to increase Fiat's stake in Chrysler from the current 20% to 25% by the end of the first quarter of 2011, and to 35% by the end of the year. He also plans on taking the company public in the second half of 2011. This could mean the re-entry of the Alfa Romeo brand on the US market after ceasing exports in 1995. Fiat hopes to take advantage of Chrysler's infrastructure with two of its models to be built in the States from 2012.
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