Fiat Chrysler Automobiles N.V. (NYSE: FCAU) and its subsidiary Ferrari N.V. announced yesterday the pricing of Ferrari’s initial public offering (IPO) of 17,175, 000 common shares at an offering price of $52.00 per share, the top of market range, for a total offering size of $893.1 million, valuing the company at $9.8 billion.
Fiat Chrysler sold 10 percent of Ferrari in the IPO.
The shares will begin trading today on the New York Stock Exchange under the stock symbol (Race).
The closing of the offering is expected to occur on October 26, 2015.
In addition, the underwriters have a 30 day option to purchase up to 1, 717, 150 common shares of Ferrari from Fiat Chrysler, according to the press release from the Fiat Chrysler Automotive Group.
The offering is the first part of a series of transactions to separate Ferrari from Fiat Chrysler Automotive.
After the completion of the offering, Fiat Chrysler Automotive expects to distribute its remaining ownership interest in Ferrari to Fiat Chrysler Automotive shareholders at the beginning of 2016.
UBS Investment Bank is acting as the global coordinator for the offering.
UBS Investment Bank and BofA Merrill-Lynch are serving as bookrunners and representatives of the underwriters for the offering.
Some of the other bookrunners include J.P. Morgan, Mediobanca, BNP Paribas, Banco Santander, and Allen & Co LLC.
The United States is the largest market for Ferraris.
Only 7,000 new Ferrari cars are made per year that helps to preserve exclusivity but that number is expected to grow 30 percent to 9,000 by 2019, the company reports.
One of the primary challenges that Ferrari faces is increasing demand of its luxury sports cars in the midst of slowing growth for luxury items in China.
Many high end luxury items have taken a hit this year in China after China’s anti-corruption campaign restricted government officials’ use of luxury goods.
The slide in China’s stock market this year has also caused a setback for China’s high end auto market.