Chrysler now totally owned by Fiat
Milan, Italy - Fiat has completed its buyout of Chrysler, making the US business a wholly-owned subsidiary of the Italian carmaker as it gears up to use their combined resources to turn around its loss-making operations in Europe.
The company annouced on January 1 that it had struck a $4.35 billion (R47bn) deal - cheaper than analysts had expected - to gain full control of Chrysler, ending more than a year of tense talks that had obstructed Chief Executive Sergio Marchionne's efforts to create the world's seventh-largest carmaker.
The Chrysler buyout talks have been closely watched by debt and equity investors because Fiat's long-term plan to cut losses in Europe depends on its ability to deepen ties with Chrysler.
The US business is now a profit centre for Fiat, but the two companies are still forced to manage their finances separately. A full merger will make it easier - but not automatic - to combine the cash pools of the two companies, giving Fiat more funds to expand its product line-up.
Fiat will discuss the merged company's future headquarters and a potential listing outside Italy at a board meeting scheduled for January 29.
The company is widely expected to move its headquarters outside of Italy, where Fiat was founded 115 years ago - a sensitive topic among local unions and politicians eager to protect jobs in Fiat's home market.
The first big test for the merged Fiat-Chrysler will be a three-year industrial plan that Marchionne is expected to unveil in May, in which he will outline planned investments and models.
While analysts have widely welcomed the Chrysler deal, which Marchionne funded without needing a rights issue, they have been more sceptical about the group's rising debt and 61-year-old Marchionne's ability to cut losses in Europe.
Fiat has said its new strategy will focus on revamping Alfa Romeo and keeping production of the sporty marque in Italy as it seeks to utilise plants operating below capacity, protect jobs and compete in the higher-margin premium segment of the market.Reuters