Getting Closer: Fiat Exercises Option in Stake of Chrysler, Now Owns 68.5 Percent
Today, Fiat announced that it has exercised an option to increase its share of Chrysler Group by 3.3 percent. With this move, Fiat now owns 68.49 percent of Chrysler Group, which includes Chrysler, Dodge, Fiat Jeep, Ram, and SRT. Mopar, the Pentastar's parts and service brand, is also included in this transaction. This is the latest move that's part of Fiat and Chrysler CEO Sergio Marchionne's grand plan to merge both automakers into one giant, global company. Marchionne believes that with this plan in place, the Fiat-Chrysler group would be in a better position to take on the likes of Toyota, General Motors, and Volkswagen. There are a few perks, besides becoming an automotive juggernaut, to Fiat's merger with Chrysler Group. One being that Fiat would have full access to Chrysler Group's deep pockets, which could help the Italian automaker bail some water out that it has taken on across the pond. Chrysler Group has become a golden goose of sorts for Fiat as the Italian automaker continues to look for ways to off-set losses sustained in Europe last year. In all, Fiat took a $903 million hit across the pond, and without Chrysler Group, those figures could've been much worse, with estimates projected as high as over $1 billion. Fiat has been chipping away at its quest to claim a full stake in Chrysler Group but it still has a ways to go. The Voluntary Employee Beneficiary Association, a trust for retired employees of Ford, GM, and Chrysler Group, owns a 3.3 percent stake in the Pentastar but it hasn't been able to come to terms with Fiat over it. Fiat has gradually acquired pieces of Chrysler Group since 2009 and has the legal right to increase its stake to 75 percent by 2014. The VEBA and Fiat talks remain at a standstill as the value of the 3.3 percent stake is debated. Fiat values these shares at a cool $4.2 billion while the VEBA thinks $10.3 billion is a fair price. Marchionne appears as if he's not holding much stock in the current discussions, though. "The talks have not produced any results so far, so we don't have anything to announce," Marchionne told Automotive News. He continued to say, jokingly, that "if [the VEBA] accept our price, we could close this week." Whenever the VEBA does decide to accept Fiat's offer, we'll bring it to you so stay tuned. Source: Automotive News (subscription required)
Carlos Lago of Motor Trend takes the Mazda Super20 out to the track and mountain roads.