Fiat to Buy Maserati Brand From Ferrari

ROME February 16, 2005: Joji Sakurai writinfg for the AP reported that Fiat SpA announced Wednesday it will buy the Maserati sportscar brand from Ferrari -- a company in which it already has a majority stake -- just three days after winning independence from General Motors Corp.

Turin-based Fiat said in a statement it was buying Maserati in a bid to find technological and commercial synergies to help develop its premium brand, Alfa Romeo. It declined to offer details about financial terms.

Fiat's unprofitable carmaking division, Fiat Auto, owns the Fiat, Alfa Romeo and Lancia brands. The Fiat group also has a 56 percent stake in Ferrari.

"This operation is essential for the future development of Alfa Romeo," said Fiat Chief Executive Sergio Marchionne.

On Sunday, Fiat and General Motors dissolved a partnership including an option that could have forced GM to buy the 90 percent of Fiat Auto SpA that it did not already own. GM agreed to pay the Italian automaker $2 billion, mostly in exchange for canceling the clause.

Maserati was founded in 1914 and acquired by Fiat in 1993. Ferrari took ownership of the Maserati brand in 1999.

Maserati sold 4,600 cars last year, according to Luca Cordero di Montezemolo, who is chairman of Ferrari. The company has targeted unit sales of at least 10,000 a year for the brand. Alfa Romeo sells around 180,000 units a year.

Maserati sells around a third of its production in North America, where Alfa Romeo is not present, suggesting that under Wednesday's deal Fiat may be able to improve distribution range for higher-margin products.

Fiat Auto had an operating loss of just under 1 billion euros ($1.3 billion) in 2003, and is expected to post a loss of around 800 million euros ($1.04 billion) for 2004. The unit is targeting an operating breakeven in 2006.