Fiat Merger With Chrysler Approved by Shareholders

Aug 01, 2014 02:30 PM EDT | Matt Mercuro

Close

Fiat shareholders have approved the automaker's merger with Chrysler, paving the way for a U.S. listing which the seventh-largest auto group in the world hopes will find an ambitions turnaround strategy.

Fiat Chief Executive Sergio Marchionne finalized the full buyout of Chrysler earlier this year, and plans on incorporating the two as a Dutch-registered combine, Fiat Chrysler Automobiles (FCA).

The motion to create FCA was approved by the required two-thirds majority of shareholders present, according to Reuters.

Approximately 8 percent of all Fiat investors voted against the merger however, and if enough of them exercise their rights to sell out, the merger could fail or be delayed, according to a condition set out as part of the merger.

Marchionne, who helped rescue Chrysler in 2009, is counting on the merger and the U.S. listing to help pay the bill for 48 billion euro ($64 billion) plan needed to grow net profit five-fold and sales by 60 percent by 2018 through gaining access to a larger pool of capital resources.

The creation of FCA will help Marchionne ease his reliance on Europe where thousands of Fiat's Italian workers are still on state-backed temporary lay-off schemes.

"With today's meeting begins the future of our company," Chairman John Elkann, the grandson of late Fiat patriarch Gianni Agnelli, said according to Reuters.

FCA's headquarters is expected to be located in London, and have its tax domicile in Britain, Fiat said in a statement. This would mean a shift away from Italy, the automaker's home for 115 years.

Fiat employs 62,000 people in Italy. Many are still on temporary layoff schemes as plants have been running at low capacity after car sales in Italy and Europe fell to all-time lows and are only slowly returning to normal.

Each investors will receive one FCA share for every Fiat share that they hold. Some will also be eligible for special voting shares, which will not be traded or listed.

Those who voted against the merger are eligible to cash exit rights of 7.727 euros per share, according to Reuters.

See Now: OnePlus 6: How Different Will It Be From OnePlus 5?

© 2021 Auto World News, All rights reserved. Do not reproduce without permission.
Get the Most Popular Autoworld Stories in a Weekly Newsletter

Join the Conversation

Real Time Analytics