Fiat spinoff of Alfa Romeo, Maserati brands possible
MILAN • Fiat Chrysler Automobiles NV is considering options including a plan to spin off the upscale Maserati and Alfa Romeo brands as well as its components operations, according to people familiar with the discussions.
The moves would focus the Italian- American company on mass-market cars to make Fiat Chrysler more attractive for a potential combination with a competitor, said the people who asked not to be identified because the deliberations are private. The luxury- car operations could be worth as much as 7 billion euros ($ 10.4 billion), while Magneti Marelli and other parts businesses are valued at up to 5 billion euros, analysts estimate.
Discussions among executives are progressing, with several options still under consideration, i ncluding just separating one or more of the component units, which also include Teksid and Comau, the people said. A final decision may not be made until early 2018 and the timing of carrying out the transactions remains uncertain, they said. Fiat Chrysler declined to comment.
The plan is also meant to unlock value for the Agnelli family and other shareholders as the company cont i nues to underperform peers, the people said. Goldman Sachs Group Inc. estimates that Fiat Chrysler’s businesses are worth about 50 billion euros on their own, double the group’s current enterprise value of 24.5 billion euros.
CEO Sergio Marchionne, 65, is preparing his final five- year business plan before he leaves the carmaker in 2019. Separating parts of the group is a familiar tool for the executive. The company spun off truck and tractor maker CNH Industrial NV in 2011 and supercar brand Ferrari in 2016. Combined, the entities now have a market value of $57 billion, compared to about $ 6 billion in 2004, when Marchionne took charge.
A breakup strategy carries risks. Alfa Romeo is in the early stages of its push to become a global luxurycar brand and still needs billions of euros in investment. And neither Maserati nor Alfa Romeo have the allure of the Ferrari marque.