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02/08/2005: "Ferrari's Arab Connection"

Italian bank Mediobanca has sold its five-percent stake on legendary Italian sportscar maker Ferrari to Mubdala, an investment company owned by the Abu Dhabi government, one of the United Arab Emirates. The transaction was valued at 114 million Euro, or circa $138 million.

Ferrari’s parent company, volume automaker Fiat, has faced steep losses for the past few years and is in dire financial condition, in spite of a recent billionaire settlement with General Motors that allowed the American company to terminate its partial ownership of Fiat.

Ferrari’s road-car division has experimented repeated sales successes, but the company is not a moneymaker mostly due to its Formula 1 program, which consumes upwards of $300 million annually, though much of that amount comes from the team’s numerous sponsorships.

The Mubdala connection, Ferrari believes, will open up several opportunities in the Middle East and North African markets.

“Our initial consideration will range from the creation and development of road and racing car testing initiatives, along with professional driving schools through to the leveraging of opportunities around brand experiences and merchandising,” company president Luca di Montezemolo expects.

(this article was taken from speedtv.com)