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Fiat’s 100% of Chrysler: what’s it mean?

on January 26 2014 | in Industry news, Latest news | by | with Comments Off

Fiat 500 Sport

Fiat 500 Sport

Fiat has confirmed the complete takeover of the Chrysler Group, once part of America’s ‘big three’ monopoly with Ford and General Motors. But what does it mean for the Italian company? Fiat acquired the remaining 41.46 per cent in Chrysler that it didn’t previously own. The stake was owned by the VEBA Trust – a retiree healthcare trust affiliated with the United Auto Workers union. The deal will see Chrysler Group pay $US1.9 billion and Fiat pay US$1.75 billion to buy out the VEBA Trust. The total of US$3.65 billion has been paid, with Chrysler adding a further US$700 million in four, equal annual instalments, with the first to be made as soon as Fiat pays up.
Sergio Marchionne, Fiat Chrysler CEO

Sergio Marchionne, Fiat Chrysler CEO

The deal ends the lengthy negotiations between Fiat CEO Sergio Marchionne and the stakeholders. The VEBA Trust had threatened to sell its shares on the open market after Fiat and VEBA valued the 41.16 per cent stake very differently. However, now that the deal is done, Marchionne’s bid to merge Fiat and cialis 10mg

Chrysler and create the world’s seventh biggest carmaker will progress. As part of the deal, the UAW union has agreed to support the Fiat-Chrysler alliance as the companies merge, including agreeing to Marchionne’s restructuring plan to make the group much more competitive and cost-effective. The merger will allow the two companies to share resources and cash much more closely across all brands – Abarth, Alfa Romeo, Fiat, Lancia and Maserati with Chrysler, Dodge and Jeep. The agreement limits the amount of money that Fiat must spend to take over and merge with Chrysler. Analysts with Bloomberg say cialis 20 mg price

that puts the Italian company in a position to gain financial resources from its US unit to help turn around unprofitable European operations. Marchionne has sought since taking the helm at Fiat in 2004 to combine the company with another carmaker to challenge Toyota and the Volkswagen Group in sales. Marchionne has been the CEO of both Fiat and the Chrysler Group since 2009. He said: “In the life of every major organisation and its people, there are defining moments that go down in the history books. For Fiat and Chrysler, the agreement just reached with the VEBA is clearly one of those moments.” “The unified ownership structure will now allow us to fully execute our vision of creating a global automaker that is truly unique in terms of mix of experience, perspective and know-how, a solid and open organisation that will ensure all employees a challenging and rewarding environment.” Fiat first started buying Chrysler stock in June 2009 as part of a US Government bailout of the carmaker, which was losing as much as US$100 million a day at the time. GM was also bailed out. Ford received some government help but mostly plotted its own course through the GFC.

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