• Sep 14th 2010 at 9:00AM
  • 5
Fiat S.p.A is a conglomerate divided into Fiat Autos and Fiat Industrial, the two combining to own or control well over 20 companies. The auto side includes Alfa Romeo, Ferrari and Maserati, Magnetti Marelli and Fiat Powertrain Technologies. The industrial side controls companies like Iveco and Case New Holland, the latter being the second largest producer of agricultural equipment in the world after Deere & Company.
Fiat CEO Sergio Marchionne, citing the divergent customers, strategies, capital needs and potential alliance partners of the two divisions, is asking shareholders to approve a demerger. If the shareholders go for it, the 111-year-old company would divide into Fiat Auto S.p.A. for the auto side and Fiat Industrial S.p.A. for the remainder.

The division of the company was approved by the board in July and shareholders have until this Thursday to make up their minds about which way to vote. If the yays have it then the two companies will be standalone entities as of January 1, 2011. Shareholders would get one share in each of the companies for every share they currently hold. Analysts are cautious but supportive of the move, which will probably be the strongest test yet of Marchionne's long-term plan for Fiat.

[Source: Financial Times]

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    • 1 Second Ago
      • 5 Years Ago
      Dividing them is a safe guard more than anything else. Its like having your house and car as collateral against a loan, and now its divided up in case things get bad, it'll be easier to manage.

      Of coarse that is a very vague description, LOL.
        • 5 Years Ago
        The article cites potential alliance partners. I think that has more to do with the fact that someone such as Lamborghini, who also has an industrial arm might resist working with Case New Holland when Fiat also owns Ferrari. Splitting the companies should make this more palatable.
      • 5 Years Ago
      I agree with this decision. It will make moving both companies forward a lot easier, as neither affects the other directly. The direction of each will benefit from a streamlined decision-making process without the other involved.
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