Fiat tie-up plan advances
Washington — Fiat SpA cleared a big hurdle in completing its long-planned merger with Chrysler Group LLC, saying the number of shareholders seeking to sell their shares didn’t surpass a threshold that could have delayed the tie-up.
Italian automaker Fiat plans to create a new company, Fiat Chrysler Automobiles NV, based in the Netherlands and domiciled in London. The tie-up was approved by shareholders on Aug. 1. But shareholders sought to sell back more than $660 million in stock; the merger would not go through under the terms of the deal.
The merger will create the world’s seventh-largest automaker.
Fiat said it will disclose the number of shares that were sold by Sept. 4, but said its review shows it will not surpass the cap. Creditors can submit opposition to the merger until Oct. 4. Fiat said it does not expect the creditors’ opposition process to prevent the closing of the merger by the middle of October.
“I am delighted with these results” said John Elkann, chairman of Fiat. “We are now looking forward to the completion of this project which has been on the drawing board since the acquisition of all of the equity interest in Chrysler Group LLC.
“The listing on the NYSE (New York Stock Exchange) will give proper relevance to the importance of the group’s activities in the U.S. market and make our financing activities more efficient.”
Dissenting shareholders can sell their shares for 7.727 euros, or about $10.18 — slightly more than the stock is currently trading — if the merger is completed. Fiat stock is up slightly in Italy trading at $9.91 a share (7.52 euros).
Sergio Marchionne, CEO of Fiat and Chrysler, said the move showed confidence by shareholders.
“The recent vagaries of the equity markets and the performance of Fiat shares in the last 30 days have added a level of complexity in this process, which was unexpected and, in my view, unwarranted,” Marchionne said.
“I am reassured by the fact that the vast majority of our equity holders have remained loyal and committed shareholders.”
“Their belief in and support of the strategic plan we laid out for the next five years is of crucial importance as we embark on the execution phase, which will dramatically improve the market positioning of our group and our brands.”
Marchionne laid out an aggressive plan in Auburn Hills in May to dramatically expand sales worldwide.