Ferrari Mailing List: Forbes: "Fiat Thinks Ferrari Is Molta Bella"

[Dennis Liu (BigHeadDennis]

Fiat Thinks Ferrari Is Molta Bella
Greg Levine, 10.01.06, 6:00 AM ET

Ferrari looks sharp. But does it look profitable? 

Luca Cordero di Montezemolo seems to think so. He's the president and chief
executive of Ferrari and the chairman of Fiat (nyse: FIA - news - people ).
And on Friday, he tightened the latter's grip on Ferrari's wheel: Fiat upped
its stake in the sports-car company to 85% from 56%. 

Under Di Montezemolo and CEO Sergio Marchionne, Fiat finally seems to know
what it wants: the Italian industrial group has turned an operating profit
for several quarters, selling off mismatched businesses like publishing and
aerospace to refocus its energies into construction and farming equipment --
and cars. 

And we all know those cars. Fiat makes a range of suburban compacts and
sedans, including the Fiat Seicento. But the firm founded by the
trend-setting Agnelli family, which still owns some 30% of it, is synonymous
with its sleek, sexy Maserati, Lancia, Alfa Romeo and Ferrari sportsters. 

Ferrari reportedly sells 4,000 of its eat-your-heart-out autos annually, at
a cool $140,000 each. And if that sounds rather exclusive, it's no
coincidence: the company with that famed rampant-stallion logo has a
production limit of 4,300 autos per year, maintaining both quality and
rarity. 

And those attributes are expensive: Fiat said it spent 892 million euros
($1.13 billion) for the 2.3 million Ferrari shares, which it bought from a
group of holders that included Mediobanca, Commerzbank and Abn Amro Holding
(nyse: ABN - news - people ). Fiat said it will use "available cash
resources" to buy the shares. 

Who holds the balance of the shares? Piero Ferrari, son of the eponymous
firm's founder, owns 10% of the sports-car company; United Arab Emirates
firm Mubadala Development owns the final 5%. The swank automaker said the
UAE investor "will remain a member of the Ferrari shareholder base," as the
parties explore an ongoing project for the development of a theme park. 

One thing the suave Agnellis would confirm: If it's a Ferrari-themed park,
it'll be a great place to impress a date.