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Fiat wants additional 3.3% stake in Chrysler

Discussion in 'Fiat Global News' started by Herbie, Jan 4, 2013.

  1. Herbie

    Herbie Regolare

    Grande Punto 1.4
    Fiat wants to buy an additional 3.3% of Chrysler from the UAW Retiree Medical Benefits Trust for $198 million, the Italian automaker said today.

    This announcement comes about six months after Fiat said it intended to raise its stake in Chrysler from 58.5% to 61.8%. The latest purchase, if completed, would bring Fiat’s stake in Chrysler to 65.17%.

    Standing in the way is an lawsuit between Fiat and the trust, known as the VEBA, over the transaction price.

    Eventually a court in Delaware is expected to determine the value of the shares, as well as the timetable by which Fiat could continue to buy more of Chrysler.

    The VEBA seeks a higher price than Fiat has offered.

    In July Fiat offered $155 million for the first batch of 54,154 Chrysler shares. The VEBA, according to the lawsuit, argued the shares are worth about $381 million. Under a complicated formula, the figures are further adjusted, according to the lawsuit.

    On September 26, Fiat asked the Delaware Chancery Court to confirm the price for the equity stake and the automaker expects a judgment within the next few months.

    Because the dispute remains unresolved, Fiat has not been able to complete the transaction for the first 3.3% stake it seeks to buy. This latest announcement would boost the tab to cover a 6.6% stake.

    Fiat calculates the price of this second batch of shares at $198 million.

    Fiat can exercise the right to buy an additional 3.3% stake every six months until it reaches the 16.6% equity cap.

    SOURCE : Fiat wants additional 3.3% stake in Chrysler | Chrysler news | Detroit Free Press | freep.com
  2. Herbie

    Herbie Regolare

    Grande Punto 1.4
    UPDATE :

    Fiat boss eyes Chrysler merger in 2014
    Posted: 03 February 2013 2041 hrs

    ROME: Fiat boss Sergio Marchionne said Sunday that he expected the merger of the Italian car giant and its US partner Chrysler will take place in 2014.

    "We will succeed in doing it," he said in an interview with the editor of the Repubblica newspaper. "We and VEBA (the United Auto Workers pension fund -- a Chrysler shareholder) have different opinions on the value of Chrysler but we will resolve the problem in 2014."

    Macchione, who heads both companies, had said on January 30 that the ties between the two automakers were "irreversible" and would merge "as soon as I can afford it" but did not put date on the merger.

    Asked on Sunday if Fiat would keep its Turin headquarters Macchione said: "We are a big group present throughout the world, it will depend on access to financial markets and the choices of the Agnelli family" who founded Fiat.
    He had "not thought" about the future name of the new entity, he said.
    The deal will ultimately give Fiat a 65 per cent stake in Chrysler and full ownership by 2015.

    Boosted by increased sales at Chrysler, the Italian giant on Wednesday reported a profitable 2012, announcing a fourth quarter net profit that rose to 388 million euros ($525 million) from 265 million euros the year before.
    The company said it was aiming for profits of between 1.2 and 1.5 billion euros this year.
    Fiat took a 20 per cent stake in Chrysler in 2009 as the third largest US automaker emerged from a government-financed restructuring under bankruptcy protection. It has since steadily expanded its stake by purchasing shares owned by the US government and the VEBA fund.

    SOURCE : Fiat boss eyes Chrysler merger in 2014 | News.com.au
    Last edited: Feb 3, 2013

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