| | Re: Fiat may gain full rights on Chrysler
I'll post the whole thing here.
On 20 January 2009, Fiat S.p.A. and Chrysler LLC announced that they were going to form a global alliance. Under the terms of the agreement, Fiat would take a 20% stake in Chrysler and gain access to its North American dealer network in exchange for providing Chrysler with the platform to build smaller, more fuel-efficient vehicles in the US and reciprocal access to Fiat's global distribution network.
The new equity holder would have the option of increasing that to as much as 35%. Fiat, the stronger of the two, would not immediately put cash into Chrysler. Instead it would obtain its stake mainly in exchange for covering the cost of retooling a Chrysler plant to produce one or more Fiat models to be sold in the U.S. Fiat would also provide engine and transmission technology to help Chrysler introduce new, fuel-efficient small cars.
The deal is the latest maneuver by Fiat's chief, Sergio Marchionne, who has pulled the Italian company back from the brink of collapse since taking over in 2004. The partnership would provide each company with economies of scale and geographical reach at a time when both are struggling to compete with larger and more global rivals like Toyota, Volkswagen and the alliance of Renault S.A. and Nissan. On April 30, 2009, Fiat announced the alliance with Chrysler, at first Fiat will get 20% stake and it can become 51% owner of Chrysler once the government loans are repaid
Fiat would not have to pay any money for its 20% of Chrysler. On June 7, 2009, the Indiana State Police Pension Fund, the Indiana Teacher's Retirement Fund, and the state's Major Moves Construction Fund asked the U.S. Supreme Court to delay the sale of Chrysler to Fiat while they challenge the deal. The funds argued that the sale went against U.S. bankruptcy law because it unlawfully rewarded unsecured creditors ahead of secured creditors. On June 9, 2009, the Supreme Court lifted the temporary hold, clearing the way for Fiat to acquire Chrysler. See Indiana State Police Pension Trust v. Chrysler for more information. On Wednesday, June 10, the Supreme Court announced that Fiat was now an owner of the new Chrysler Company a.k.a Chrysler Group LLC. Marchionne took over as the CEO of Chrysler following its exit from bankruptcy; under his leadership Chrysler has taken on a structure similar to that of Fiat and has released, in quick succession, a large number of completely redesigned or refreshed vehicles.
January 10, 2011 Fiat share increased to 25% of Chrysler as the first step of three performance events was achieved.