Three major financial institutions, Sanpaolo, Mediobanca and BNP Paribas, have all reportedly submitted bids to become Fiat’s partner in Fidis Retail
Three major financial institutions, San Paolo-IMI Banking Group, Mediobanca, and the French banking group, BNP Paribas, have all reportedly submitted firm bids to become Fiat’s full partner in Fidis Retail Italia Spa, the profitable customer finance unit, reports Reuters.
Fidis Retail Italia Spa is one of the real jewels in Fiat’s crown, the finance arm turning in profits even during the Fiat Group’s lowest point three years ago. It was at this point, in 2003, that Fiat sold a 51 pct stake in its then Fidis division to a consortium of banks (BancaIntesa, Capitalia, San Paolo-IMI and Unicredito Italiano) as the carmaker urgently raised funds to stay afloat. In November 2004 the new entity, Fidis Retail Italia Spa, bought out the UK finance operation to add to its pan-European spread, and last year it constituted an new Irish arm.
"Through its own subsidiaries, Fidis Retail Italia offers the End Customer a range of competitive financial products (instalment plans and leasing), combined with additional integrated services (Credit Protection Insurance, Extended Warranties, etc.) intended to facilitate the purchase of new and used cars sold through the network of affiliated dealers, in order to enhance customer satisfaction and promote customer retention by offering a high level of service," the company says in its mission statement. Currently, Mario Mauro, a long-time San Paolo Bank member is the Chairman of the Board of Directors, while Alain Jacques Breuils is Deputy Chairman. Fidis Retail Italia Spa has around 1,200 employees, manages funds today close to 9 billion euros, with more than three quarters of its financing operations being focused in the retail sector.
Fidis Retail Italia Spa has around 1,200 employees, manages funds today close to 9 billion euros, with more than three quarters of its financing operations being focused in the retail sector. The group of banks didn’t see themselves cast as long-term shareholders and have recently been looking to divest themselves of the majority stake, over which Fiat continues to retain the option of a buy-back. Fiat CEO Sergio Marchionne recently hired leading financial institution Goldman Sachs to solicit bids for a 51 pct stake in Fidis, and it has been reported that San Paolo-IMI, Mediobanca and BNP Paribas - all three banks which have a long history of involvement with Fiat - submitted firm bids ahead of Friday’s (24th March) closing date. Reuters report that GE Capital may also have officially entered the bidding process last week, quoting an informed source as saying that: "The invitation (for offers) has closed today. Among the expressions of interest are those of Mediobanca, BNP, Sanpaolo and probably GE Capital."
Last Friday morning, San Paolo-IMI’s Director-General Pietro Modiano suggested, during a press conference to announce their 2005 Full Year results, that the bank may well bid for Fidis. Meanwhile the Italian newspaper Il Messaggero said last week that Fiat was looking for a partner for the business who would focus the financial side of matters, leaving Fiat free to manage the commercial and operations side of the readjusted firm.