After 111 years of
filling out the pages of Italy's industrial history, the
Fiat Group's board met in Turin yesterday to give their
approval to plans to break the conglomerate up. Founded
on July 11, 1899, by a group of investors that included
Giovanni Agnelli, Fiat S.p.A. went on to shape and
define the industrial rise of the Italian, building
everything from cars and trucks to aircraft and tanks.
A very brief statement
issued in Turin yesterday announced the new that the
board had given approval to the proposal: "The
Shareholders of Fiat S.p.A, which met today in an
Ordinary and Extraordinary General Meeting, approved the
partial and proportional demerger plan of Fiat S.p.A. to
Fiat Industrial S.p.A. and related resolutions."
The
idea of a "spin-off" of Fiat Group's automotive
activities has been talked of for decades, a separation
that would unlock true shareholder value but it was
always fiercely resisted by the Agnelli family who built
the empire and in recent years the late Fiat Chairman
Gianni Agnelli was staunch in his support for keeping
the company together. However the colossus that the
Agnelli's built has been hacked down somewhat over the
years, particularly as the automotive division has
demanded regular infusions of cash, and most recently,
the Group's aeronautical activities, under the "Fiat
Avio" banner, were sold off to a venture capitalist to
help plug the gap during the carmaker's last downturn
just under a decade ago. The departure of veteran Luca
di Montezemolo in late April from his position as Fiat
Group Chairman cleared the way for the break up and the
elevation to the role of Agnelli family heir John Elkann,
who champions Group CEO Sergio Marchionne's plans, is
believed to have been instrumental in sealing
shareholder support. Marchionne sees the break up as a
key plank in building a new global carmaker which would
include Chrysler Group.
Fiat has
presented the plans as a "demerger" rather than a
"spin-off", with the bulk of the automotive assets being
grouped into a new "Fiat", comprising of Fiat Group
Automobiles (Fiat, Abarth, Alfa Romeo and Lancia), as
well as Ferrari, Maserati, the components' divisions and
Fiat Powertrain's (FPT) automotive activities. Also into
the new "Fiat" will go the Group's 20 percent stake in
Chrysler Group. Into the new "Fiat Industrial" company
will go the agricultural-and-construction equipment
supplier CNH Global, the truck-and-buses unit Iveco, and
FPT's industrial-and-marine activities. Most previous
spin-off talk has focused on separating the activities
of FGA, this plan through creates a full-line automobile
manufacturer, in theory though it is the other divisions
that are being 'demerged'. The Group's debt pile will be
spread evenly.
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