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Abstract

On April 2010, Mr Sergio Marchionne, CEO of Fiat Group, announced the intention to proceed with a spin off of the business of industrial vehicles. The spin off would lead to the creation of a new entity, Fiat Industrial, listed on Milan Stock Exchange. The spin off was carried out until the end of 2010 and Fiat Industrial was officially listed on 3 January 2011. The case study illustrates the main restructuring options for a conglomerate (spin off, carve out and tracking stocks issues) and highlights the comparative advantages of the different options. The case is also useful for the analysis of the conglomerate discount that Fiat was suffering from before the spin off deal. Finally, the case applies comparable multiples valuation in order to provide a valuation of Fiat group as a sum of parts to be compared with the market valuation of the conglomerate before the spin off.
Location:
Size:
Not available, total sales of the company involved EUR50 billion

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Abstract

On April 2010, Mr Sergio Marchionne, CEO of Fiat Group, announced the intention to proceed with a spin off of the business of industrial vehicles. The spin off would lead to the creation of a new entity, Fiat Industrial, listed on Milan Stock Exchange. The spin off was carried out until the end of 2010 and Fiat Industrial was officially listed on 3 January 2011. The case study illustrates the main restructuring options for a conglomerate (spin off, carve out and tracking stocks issues) and highlights the comparative advantages of the different options. The case is also useful for the analysis of the conglomerate discount that Fiat was suffering from before the spin off deal. Finally, the case applies comparable multiples valuation in order to provide a valuation of Fiat group as a sum of parts to be compared with the market valuation of the conglomerate before the spin off.

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Location:
Size:
Not available, total sales of the company involved EUR50 billion

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