Sergio Marchionne looking to unify Fiat and Chrysler by 2015

Article by Christian A., on November 1, 2012

A “unification” of Fiat SpA and Chrysler Group LLC is what Sergio Marchionne, the CEO of both car companies, hopes to achieve by 2014 or 2015. In a conference call last Tuesday, Marchionne said that this has always been his objective. He explained that its strategy has yet to be mapped out, considering that it first has to resolve the European situation.

Marchionne made these statements as he was discussing Fiat’s plan to buy the remaining 41.5% of Chrysler. This stake is owned by a United Auto Workers union healthcare trust for retired Chrysler workers, a voluntary employees beneficiary association. Fiat took a 20% share in Chrysler during its bankruptcy but it has since increased its ownership to 58.5%.

Fiat would first need to strengthen its financial position in the European economy. He said that it’s clear from Fiat’s capital needs and its liquidity, it’s not likely to have the ability to finance a takeout of the minority stake in Chrysler, “unless something extraordinary happens and we find liquidity through other means." He added that what he can pledge to do is that Fiat will push through with its plan to buy 3.3% of Chrysler every six months by exercising a call option permitted in the 2009 bankruptcy agreement with the U.S.

Treasury. In this manner, Fiat can purchase as much as 16.58% of Chrysler. Doing so may increase Fiat's stake to about 75%. Fiat filed a suit against the healthcare trust in September since the trust did not sell the 3.3% share in July as Fiat had filed for.

Both sides are not in agreement over the price that Fiat still has to pay to get the increased share. Fiat made an offer of $139.7 million. So far, there’s no update available about the suit. The July call option was the first one to be exercised by Fiat. Marchionne said that Fiat intends to exercise another call option in January.

If you liked the article, share on:

Pin It

Comments

Recommended

Lamborghini has disclosed that it is looking into the possibility of releasing electric vehicles. With the Volkswagen Group revealing that it will be releasing electric vehicles within several years, there...
by - March 25, 2017
Daimler AG, through its Smart division, has disclosed that its two electric models, the Smart ForTwo and the Smart ForFour are now open for orders in Germany. Official market launch...
by - March 25, 2017
Lamborghini has officially offered clear proof that the Huracán Performante was able to set a new record at the Nürburgring Nordschleife with a time of 6:52.01 It was in early...
by - March 25, 2017
Top Gear has revealed that for its “Stars in a Reasonably Fast Car” segment, it will now be using a slightly enhanced Toyota GT86, which in the U.S. market is...
by - March 24, 2017
Porsche is laying aside any plans of pushing another hybrid hypercar into their line-up -- at least not at this time. Oliver Blume, Porsche Global Chief confirmed in a recent...
by - March 24, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries