Marchionne reaffirms Fiat’s interest in acquiring all of Chrysler

Article by Anita Panait, on April 9, 2012

Fiat CEO Sergio Marchionne confirmed that the Italian carmaker is still bent in increasing its ownership in Chrysler Group from 58.5% to 100%. According to Marchionne, who also serves as Chrysler’s chief executive, Fiat is ''technically ready'' to commence acquiring the shares in the US carmaker that it does not own yet.

The remaining 41.5 percent stake in Chrysler is currently held by Voluntary Employee Beneficiary Association (VEBA), a trust for U.S. autoworkers. Marchionne, who was speaking on the sidelines of Fiat's annual general meeting, said that Fiat could choose between two options to purchase the VEBA stake.

The first option would allow Fiat to acquire up to 16.6 percent of Chrysler between July 2012 and June 2016, by purchasing no more than 3.32 percent of total shares every six months. According to the estimates of financial analysts, Fiat would pay slightly under $200 million for the single purchase of the 3.32 percent stake, based on Chrysler and Fiat's results from the last four rolling quarters. 

The second option, dubbed the Equity Recapture Agreement, allows Fiat to acquire VEBA’s 41.5 stake for $4.25 billion, plus 9% compounded interest accrued annually from Jan. 1, 2010. 

The money previously received by VEBA will be deducted from the figure stated. Marchionne explained that it is highly unlikely the two companies will merge this year. Meanwhile, Marchionne revealed that Fiat has no plans to spin-off the luxury Ferrari and Maserati units, adding that he wants them inside the group.

If you liked the article, share on:

Comments

Recommended

McLaren has already shown some interest in electrifying their models. And initially, we thought that they will just use hybrid systems to use across their current lineup. Nevertheless, we have...
by - August 19, 2017
Fifty years after its glorious victory at the 24 Hours of Le Mans, Ford launches the 2018 Ford GT ’67 Heritage Edition at the 2017 Monterey Car Week. The red...
by - August 18, 2017
Hyundai has recently unveiled an unnamed pre-production model of its new fuel cell SUV. We don’t know what to call this model just yet, but sources say that this model...
by - August 18, 2017
This weekend at the 2017 Pebble Beach Concours d’Elegance, the BMW Z4 Concept will make its first public appearance. The good news is that we will finally have a real...
by - August 18, 2017
While Honda’s new 2018 HR-V will be rolling out at the dealerships with just a few updates, the company is certainly not giving up its spot as the best-selling vehicle...
by - August 18, 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