Fiat has purchased the remaining stake in Chrysler to become the sole owner of the US car firm. In a deal worth £2.2billion, the Italian company bought the remaining 41.46% of Chrysler from the VEBA Trust (Voluntary Employee Beneficiary Association) made up of current and former Chrysler employees.
Fiat Chief Executive Sergio Marchionne says: ‘In the life of every major organisation and its people, there are defining moments that go down in the history books. For Fiat and Chrysler, the agreement just reached with the VEBA is clearly one of those moments.’
Fiat took 20% of Chrysler in 2009 and, before this deal, controlled 58.5% of the US car maker. Its completion of the takeover is not an instant guarantee of success: Fiat is still haemorrhaging cash and has considerable ongoing debt. In contrast, Chrysler has repaid the US government bailout it was given in 2009, with the North American operations providing healthy profits.
Fiat-owned brands including Alfa Romeo are only just beginning to come out of an investment deep freeze, which has seen replacements for models such as the 159 delayed – while Lancia’s European range has been restricted to rebadged Chryslers. Without Chrysler, Fiat would have posted a loss in the first three-quarters of 2013, as it did in 2012.
Yet Marchionne sees the buyout as a vital strategic move in his plan to take on the likes of VW Group on a global scale. ‘The unified ownership structure will now allow us to fully execute our vision of creating a global automaker that is truly unique in terms of mix of experience, perspective and know-how,’ he says. The deal also avoids the possibility of VEBA taking its stake in Chrysler public, as it had the right to demand an Initial Public Offering.
Fiat group isn’t without its bright points, though: Ferrari posted a 23% profit jump in the first three quarters of 2013, while Maserati has seen its greatest sales in history, thanks to a broader line-up that will see the new Ghibli and Quattroporte bolstered by the forthcoming Levante SUV. Alfa Romeo will be revitalised under a new plan to push its sporting heritage with rear-wheel drive and all-wheel drive models in place of its current hatch models.