Fiat SpA named Agnelli family heir John Elkann to become chairman as Italy's biggest carmaker prepares to spin off the auto unit from truck and tractors.
Elkann, 34, will replace Luca Cordero di Montezemolo in the top position, the Turin-based company said today. Fiat has revived a plan to separate the car division, according to two people with knowledge of the matter, who asked not to be identified prior to an announcement.
Elkann, the grandson of former Chairman Giovanni Agnelli, is currently Fiat vice chairman and head of the family's holding company. With a separation of the auto operations, Chief Executive Office Sergio Marchionne would have an entity to facilitate future alliances, and a share sale would generate cash to expand. The unit accounted for 56 percent of 2009 sales.
"The spinoff is very positive for Fiat as it helps to bring out the value from the Italian carmaker," said Karim Bertoni, who helps manage $18.5 billion at Geneva-based Banque Syz & Co. "That's why shares are moving up."
Fiat rose 89 cents, or 9.3 percent, to 10.42 euros in Milan, the most in a year, valuing the carmaker at 12.4 billion euros. Shares of the Agnelli family's Exor SpA, Fiat's largest shareholder, gained 7.2 percent to 13.93 euros.
Banks have been asked for funds to help finance the spinoff, which the company may announce tomorrow and complete before the end of the year, another person said. A Fiat spokesman declined comment.
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