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Fiat Chrysler Shares Spike After Company Announces Plan To Spin Off Ferrari

Myles UdlandOct 29, 2014, 18:40 IST

Fiat Chrysler is spinning off Ferrari and now its stock is surging.

In pre-market trade on Wednesday, shares of Fiat Chrysler trading in New York were up better than 13%.

Shares of Fiat listed in Milan were up about 5% following the news.

According to headlines from Reuters, Fiat Chrysler said it will offer a 10% stake of Ferrari on the market and distribute the rest of the company to its shareholders.

In a statement, Fiat CEO Sergio Marchionne said, "As we move forward to secure the 2014-2018 Business Plan and work toward maximizing the value of our businesses to our shareholders, it is proper that we pursue separate paths for FCA and Ferrari."

Fiat Chrysler's board also mandated that management complete the spin off in 2015, and shares of Ferrari will be listed in both the US and another European market.