Fiat has exercised its option to take a larger stake in Chrysler Group LLC. From the moment Fiat agreed with Chrysler creditors during the Chapter 11 proceedings -- including the US Government -- to acquire 20 per cent of the reinvented Chrysler Group LLC, the offer was on the table for the Italian company to pick up more.
Under the operating agreement, Fiat is not permitted to acquire a dominant share of the American company until all the debt owed to the US and Canadian governments has been repaid, which Chrysler foresees happening before the end of the second quarter this year.
Upon repayment in full, the way is open for Fiat to up its interest in Chrysler by 16 per cent. Fiat will be required to pay US $1.268 billion.
"The transaction that we are announcing today represents a historic step for Fiat and Chrysler and is a source of great satisfaction and pride for both," Chairman of Fiat, John Elkann, was quoted as saying in a press release.
"Over the past couple of years, Fiat and Chrysler have worked side by side with commitment and mutual respect. With the contribution of everyone who works with us and with the full support of myself and my family, from today this spirit of collaboration will become even stronger, as we continue to produce appealing, fun, safe and eco-friendly automobiles."
The increased share in Chrysler is the culmination of plans set in place by Fiat CEO, Sergio Marchionne (pictured).
"This is a fundamental step toward completion of the momentous integration of Fiat and Chrysler, initiated less than 2 years ago, that will result in the creation of a global automaker," Marchionne said.
"We have chosen to accelerate the pace to bring about, in the shortest possible time, the birth of a single group capable of fully leveraging the joint development of the respective international activities.
"Chrysler is undergoing an extraordinary industrial and financial turnaround and Fiat is ready to take control, in order to bring even greater stability and strength to the relationship in the interests of both.
"The transaction announced today, together with the expected achievement of a further 5 per cent interest before year end, will enable us to bring to fruition the vision upon which the alliance was founded: the creation of an efficient and competitive global automaker, possessing advanced technologies and the determination to establish itself as a leader in the sector.
In so doing, we will be able to guarantee our employees a more certain future and challenging environment, where cultural exchange and integration, together with a competitive spirit, will provide the ideal conditions for their professional and personal growth."
Read the latest Carsales Network news and reviews on your mobile, iPhone or PDA at carsales' mobile site...