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.
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