Monday 15th November 2010

Fiat Buys Back Ferrari Stake From Abu Dhabi

Mubadala stake gives Fiat 90 per cent of Ferrari

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Fiat has bought back the 5 per cent stake in Ferrari that Abu Dhabi investment company Mubadala purchased five years ago.

The move gives Fiat back 90 per cent of Ferrari. According to UAE newspaper, The National, the buy-back has cost Fiat £104m.

"I can confirm that Fiat has exercised the call option for the purchase of the Ferrari stake held by Mubadala," said a Fiat spokesman. "We have no further comment to make."

But although Fiat is being tight-lipped as to why it wanted that extra five per cent, industry rumours suggest that it could be because Fiat is toying with the idea of offering Ferrari shares to the public, possibly leaving itself as little as 51 per cent.

Such a move would be risky but would generate huge amounts of cash – a recent Morgan Stanley report suggested that Ferrari is worth £2.6bn – something that Fiat could desperately do with to help reinvigorate Chrysler.

[sunsurfer]

Hmmm... very interesting. I wish Fiat all the best but a tie up with Chrysler - America's third major car manufacturer - may be a move too far. If Ferrari are worth 2.6 billion then Fiat are selling the family silver in the hope of making a the combined Fiat/Chrysler project work.

Very risky strategy partnership. Daimler couldn't make it work and the crude badge engineering (Chrysler 300C badged as a Lancia in Europe) makes me doubt Fiat will make it work.

Why it matters is the energy and resources they spend trying to create Fiat/Chrysler could be energy and resources spent on exciting new Alfa Romeos, Fiats and Lancias.

[Fetchez la vache]

...or maybe Fiat wanted to buy them back before VW got hold of them, if other reports are to be believed.

[jammy_basturd]

Anyone know if Fiat has suffered a net loss, or a gain in this deal with Mubadala?

[nsmith1180]

I reckon that Ferrari/Fiat quite liked the Naked look of the Sauber this year so are getting rid of anyone with a stake and a claim on F1 Livery.

[collateral]

Don't know why they'd want to sell and then throw the money into the Chrysler black hole.

I think the 500 has limited appeal in the States, and what else do they have?

[85Carrera]

why bother invigorating chrysler?

[McSam]

jammy_basturd said:

Anyone know if Fiat has suffered a net loss, or a gain in this deal with Mubadala?

If the quote of £2.6bn net worth is correct, then Fiat just bought £130m of Ferrari for £104m, so, not bad

[P4ROT]

McSam said:

jammy_basturd said:

Anyone know if Fiat has suffered a net loss, or a gain in this deal with Mubadala?

If the quote of £2.6bn net worth is correct, then Fiat just bought £130m of Ferrari for £104m, so, not bad

Yes- that seems weird- I would have thought Mubadala would be the selling their share at a profit though.

[Hughesie]

P4ROT said:

McSam said:

jammy_basturd said:

Anyone know if Fiat has suffered a net loss, or a gain in this deal with Mubadala?

If the quote of £2.6bn net worth is correct, then Fiat just bought £130m of Ferrari for £104m, so, not bad

Yes- that seems weird- I would have thought Mubadala would be the selling their share at a profit though.

Depends on what Mubadala paid for it in the 1st place, and it depends on what the buy back price was written into the contract.

[bobberz]

sunsurfer said:

Hmmm... very interesting. I wish Fiat all the best but a tie up with Chrysler - America's third major car manufacturer - may be a move too far. If Ferrari are worth 2.6 billion then Fiat are selling the family silver in the hope of making a the combined Fiat/Chrysler project work.

Very risky strategy partnership. Daimler couldn't make it work and the crude badge engineering (Chrysler 300C badged as a Lancia in Europe) makes me doubt Fiat will make it work.

Why it matters is the energy and resources they spend trying to create Fiat/Chrysler could be energy and resources spent on exciting new Alfa Romeos, Fiats and Lancias.

In all fairness, Daimler-Benz pretty much raped Chrysler and left them for dead, which has found them in the situation they are in now.

[Crispy Rice]

It's sad Facebook is worth 50 Billion and Ferrari is only worth 2.6!

I wonder how many Billion Pistonheads is worth!

[nsmith1180]

Crispy Rice said:

It's sad Facebook is worth 50 Billion and Ferrari is only worth 2.6!

I wonder how many Billion Pistonheads is worth!

Look at your market. everyone is on Facebook or can get on it if they want.

You need 100k + to be in Ferrari's target market. As crazy as it seams, the potential profit from Facebook is much higher than the potential profit from selling motors at 150k a pop.

[McSam]

Crispy Rice said:

It's sad Facebook is worth 50 Billion and Ferrari is only worth 2.6!

I wonder how many Billion Pistonheads is worth!

Advertising to five hundred million people is rather out of Ferrari's reach. TO be honest, I'm surprised Ferrari are worth as much as 5% of Facebook!

[sunsurfer]

The Crack Fox said:

sunsurfer said:

Hmmm... very interesting. I wish Fiat all the best but a tie up with Chrysler - America's third major car manufacturer - may be a move too far.

They've already done it...

Yes dim witted of me ;-) What I was trying to say is that concentrating all your resources and selling the family heirlooms like Ferrari in an effort to ensure the Fiat/Chrysler partnership will work seems shaky and risky.