Fiat will not need to spend the entire allotted budget for buying shares from investors who opted to sell ahead of its merger with Chrysler Group. Fiat said in a statement that based on a preliminary tally, the amount needed to purchase those shares will top EUR500 million ($658 million), thereby clearing a hurdle for the Italian carmaker.
The merger would have been delayed if the amount needed to buy the shares exceeded the allotted budget. Fiat Chairman John Elkann expressed delight in the result of the tally, adding that they are now looking forward to the completion of the merger.
Fiat-Chrysler chief executive Sergio Marchionne remarked that he was reassured by the fact that the vast majority of shareholders remained loyal and committed. He quipped that investor support is crucial in executing the merger.
Marchionne had said that that if a significant number of investors were to exceed the cap, he would restart the merger process, which means a delay of several months. Under Italian law, Fiat investors could sell their holdings since the carmaker is shifting its registered offices away from the country.
According to Fiat, it was completing counting shares for which cash exit rights had been validly exercised. Fiat said it would provide final details of the count by September 4.
Fiat said the merger is on pace for completion the mid- October as planned. Investors not supporting the merger were given the chance to sell their shares back to Fiat at EUR7.727 per share. [source: Bloomberg.com]