Fiat is in the process of acquiring its partially owned American beefy auto-brand, Chrysler LLC. Apparently, Fiat is in a discussion with several banks for financing $ 10.3 billion to purchase the remaining Chrysler stake held by the United Auto Workers (UAW) retiree health trust. A verbal consideration is going on between Fiat CEO and a pool of banks including America Corporation, Deutsche Bank AG, Goldman Sachs Group and BNP Paribas SA to refinance the company’s loan and to revise both the companies debt at a lower rate.
In 2008, crisis in auto industry hit the American automaker severely and the company reached the dissolution stage. Later the company emerged from bankruptcy with reorganized planning and was divided into UAW, Fiat and US as well as Canadian Government who became the stake owners of Chrysler. Later, Fiat acquired the share of the US and Canadian government with 58.5% aggregated stake in Chrysler. Fiat attempts to amalgamate Chrysler and itself based on the company’s approach to consolidate and form a new cohesive global auto group to challenge the industry giants, General Motors and Volkswagen AG.
The company intends to complete the acquisition process by the end of this year, as it depends partly on the legal case between Fiat and UAW retiree health trust over the price of Chrysler shares. Currently, the case is in hearing phase and is expected to be resolved by the end of July. Apparently, Fiat may also transfer the company;s headquarter from Italy to US after the new development, as North America would be the company’s largest market by revenue. The other likely option after merging both brands is, Fiat may revise both companies debt and establish a new company in the US, whose shares will get exchanged with the existing Fiat shares owned by the company’s stakeholders.
Although, Fiat recently hasn’t shared any word on the finance terms and loan amount but company’s CEO (Chrysler and Fiat) declared the merger of both companies at the 2013 Geneva Motor Show which was held in February. Fiat is the world’s 11th largest automobile manufacturer and is more than a century old. Chrysler has to supply nine new models in the European market under the Fiat brand, revealed in the company’s five year plan for product pipeline which has shown the company’s integration to conceive a new leading global automobile group.
Source – AutoNews