Fiat to up stake in Chrysler to 30%

[rickaren]

Fiat to up stake in Chrysler to 30% within two months

04/08/2011

MILAN — Italian auto giant Fiat is likely to increase its stake in Chrysler to 30 percent from 25 percent in the next month or two, chief executive Sergio Marchionne said in reports on Friday.

"I think that we are very close to the second five percent (increase) that should be determined within the next 30 to 60 days," Marchionne said Thursday in Bologna, according to several Italian newspapers.

The auto giant is likely to raise its stake again to 35 percent "before the end of the year, possibly even before then," he added.

In January, Fiat increased its stake in Chrysler to 25 percent from 20 percent as part of a deal signed after the iconic US auto brand emerged from bankruptcy in 2009.

The five-percent increase was made possible after Chrysler announced that it would begin production of new Fiat-designed Fully Integrated Robotized Engines (FIREs) at its plant in Dundee in the US state of Michigan.

According to the takeover terms, Fiat can raise its stake to 30 percent once Chrysler has reached a certain level of sales outside the US, Canada and Mexico.

Marchionne, who also heads up the US auto company, said in January that Fiat may boost its holding to 51 percent before a planned share offer by the Chrysler Group at the end of this year.

[dhh3]

Although Mr. Marchionne said some bad things about the Jeep Commander, he must be doing something right. Bravo.

[rickaren]

Chrysler Group LLC Meets Second of Three Performance Events; Fiat Increases Ownership to 30 Percent

April 12, 2011 , Auburn Hills, Mich. - Chrysler Group LLC today announced that Fiat's ownership interest in the Company has increased from 25 percent to 30 percent, effective today. The increase is the result of the Company’s achievement of the second of three performance-related milestones outlined in a recent amendment to its June 10, 2009, Operating Agreement, which broadens the Chrysler Group-Fiat partnership and enhances Chrysler Group’s international market position.

The second milestone required Chrysler Group to achieve cumulative revenues of more than $1.5 billion attributable to Company sales made outside of Canada, Mexico and the United States (the “NAFTA Countries”) after June 10, 2009, and to enter into the following with Fiat or its affiliates:

an agreement covering at least 90 percent of Fiat dealers in Brazil for the distribution of one or more Company products (including Chrysler Group products rebadged and sold under the brand names of Fiat Group Automobiles);

an agreement covering at least 90 percent of Fiat dealers in the European Union (EU) for the distribution of one or more Company products (including Chrysler Group products rebadged and sold under the brand names of Fiat Group Automobiles), and providing for the pooling of Chrysler Group and Fiat vehicle fleets in the EU for CO2 emissions ratings; and,

an agreement providing for compensation to the Company for the use of its technology by Fiat or its affiliates outside of the NAFTA countries.

The ownership interests of Chrysler Group’s members are now:
UAW VEBA

59.2 percent
Fiat

30.0 percent
U.S. Treasury

8.6 percent
Canadian Governments

2.2 percent

Chrysler Group reached the first performance event in January 2011 with the United States production of the fuel efficient Fully Integrated Robotized Engine (FIRE) in Dundee, Mich., thereby increasing Fiat’s ownership from 20 to 25 percent. Fiat has the opportunity to further increase its ownership in Chrysler Group to 35 percent through an additional performance-related milestone relating to commercial production in the United States of a 40-mile-per-gallon vehicle based on Fiat platform technology.