Fiat may gain full rights on Chrysler

[Umang]

Fiat CEO Sergio Marchionne has said that it is "possible" that his company will take a controlling stake in Chrysler Group LLC by the end of the year. Marchionne, who is also CEO of Chrysler, wants to increase Fiat's share of the American automaker to a majority 51 percent. That would ensure Fiat's control of the company before Chrysler once again goes public in an IPO.

"I don't know whether it is likely, but it is possible that we'll go over the 50 percent mark if Chrysler decides to go to the markets in 2011. It will be advantageous if that happens," Marchionne told reporters in Italy on Monday. But there are obstacles to the deal. Chrysler will have to first pay back $7.4 billion in government loans from the United States Treasury, the Canadian federal government and the province of Ontario. Either that or the loans will have to be refinanced before Fiat can purchase an increased share in Chrysler. Marchionne hopes to refinance the loans in the first quarter.

Read more: Fiat may gain full ownership of Chrysler by end of 2011

 

[Ichimaru]

Virtually FIAT is already the owner of Chrysler.
All the decisions regarding the sales and distribution of cars under Chrysler, Dodge and Jeep brands are taken by FIAT.

 

[Umang]

Virtually FIAT is already the owner of Chrysler.
All the decisions regarding the sales and distribution of cars under Chrysler, Dodge and Jeep brands are taken by FIAT.

Yup. i knew that already..guess how?? your signature!

 

[Ichimaru]

Hehe.
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.

 

[visran]

Fiat wants to increase stake in Chrysler to 65 percent

To purchase 3.3 percent

Fiat is interested in increasing its stake in the Chrysler Group to 65 percent in the near future.

They plan on doing this by exercising their option to acquire an extra 3.3 percent from the UAW's retiree health-care fund. For this to happen, Fiat calculated they have to pay 198M USD for the second segment of the voluntary employees beneficiary association's (VEBA) holding.

Back in July they exercised their option to acquire a first 3.3 percent portion of the remaining VEBA holding, while later on in September they asked a United States court to confirm the price they have to pay in order to increase their stake at Chrysler. Fiat wasn't able to reach an agreement with VEBA which has 41.5 percent of Chrysler, while the rest belongs to the Italian automotive giant.

In the long run, Fiat will want to gain full ownership of Chrysler.

Fiat wants to increase stake in Chrysler to 65 percent