Chrysler - Fiat Deal Finalized after U.S. Supreme Court Clears the Path, Marchionne Appointed New Chrysler Group CEO
The U.S. Supreme Court has finally cleared the way for the government-backed sale of Chrysler LLC to the Fiat Group. The Supreme Court rejected arguments from three Indiana pension funds and other opponents of the transaction to delay the deal while the American automaker also won a court permission to eliminate a total of 789 dealers across the country that lost their franchise agreements overnight as part of the company's downsizing plan. The new alliance will see the Fiat Group owning a 20 percent stake in Chrysler LLC which will be renamed to 'Chrysler Group LLC', while the U.S. Treasury and the Canadian Government have been issued an equity interest equal to 8 percent and 2 percent "on a fully diluted basis", respectively. Under the agreement, Fiat's stake in the Chrysler Group LLC will increase in increments by up to a total of 35 percent but the Italian automaker cannot obtain a majority stake in the company until all taxpayer funds have been repaid.
"This is a very significant day, not only for Chrysler and its dedicated employees, who have persevered through a great deal of uncertainty during the past year, but for the global automotive industry as a whole," said Sergio Marchionne, who today was named Chief Executive Officer of Chrysler Group LLC.
Aside from Marchionne, who is also Chief Executive Officer of Fiat S.p.A., the new Chrysler will be managed by a nine-member Board of Directors, consisting of three directors to be appointed by Fiat, four directors to be appointed by the U.S. Government, one director to be appointed by the Canadian Government and one director to be appointed by the United Auto Workers' Retiree Medical Benefits Trust.
In a joint statement, the two companies said that the Board is expected to name C. Robert Kidder as Chairman.
"We intend to build on Chrysler's culture of innovation and Fiat's complementary technology and expertise to expand Chrysler's product portfolio both in North America and overseas," said Marchione. "Those Chrysler operations assumed by the new company that were idled during this process will soon be back up and running, and work is already underway on developing new environmentally friendly, fuel-efficient, high-quality vehicles that we intend to become Chrysler's hallmark going forward."
"This has, I know, been a difficult process for everyone involved, but we are ready to prove to the American consumer that Chrysler can once again be a strong, competitive company that produces a full portfolio of reliable vehicles that capture the imagination and inspire loyalty," Marchionne added.
The new alliance between Fiat and Chrysler creates the sixth largest carmaker in the world with combines sales of around 4.5 million vehicles globally based on 2008 results.
- U.s. Fiat Dealers Disappointed By New Decision To Delay Alfa Romeo's Return
American fans of the Alfa Romeo brand are not the only ones to be upset by the Fiat-Chrysler alliance's most recent decision to delay the scheduled return of the Italian automaker to the States. So are the company’s newly launched Fiat dealerships...
- Fiat Completes Purchase Of Chrysler From U.s. And Canadian Governments, Us Taxpayers Lose $1.3 Billion
The Fiat Group today purchased the remaining Chrysler LLC shares held by the U.S. and Canadian governments. The Italian company acquired a 1.5% fully diluted stake in Chrysler Group LLC from Canada for US$125 million, and a 6% stake from the United States...
- Report: Fiat Group May Raise Its Chrysler Stake From 20% To 51%
Italian carmaker Fiat may increase its stake in the Chrysler LLC group from 20 per cent it owns today to 51 per cent before an initial public offering (IPO) by the U.S. automaker, the firm's chief executive officer, Sergio Marchionne, told reporters...
- Chrysler Llc Names Ex-duracell Chairman C. Robert Kidder As Robert Nardelli's Succesor
Bankrupt U.S. automaker Chrysler LLC today announced that former chief of Borden Chemical and of Duracell International, will be appointed chairman of the new Chrysler once the company exits bankruptcy and completes the alliance with the Fiat Group. Kidder...
- Breaking News: Fiat Confirms Plan To Take 35% Stake In Chrysler Llc
Confirming earlier reports, the Fiat Group and Chrysler LLC today issued a joint statement revealing that they have signed "a non-binding term sheet to establish a global strategic alliance." Under the agreement, Fiat will take an initial 35% equity interest...