Aug. 29--Fiat's merger creating a single, global automaker, Fiat Chrysler Automobiles, has cleared its biggest remaining hurdle.
The Italian automaker said Friday that shareholders asking for cash rather than shares in the new combined company will not exceed a 500-euro limit set in the merger agreement. Fiat SpA shareholders could choose between accepting shares in FCA or selling their shares for 7.727 each.
CEO Sergio Marchionne is combining Fiat and Chrysler into a new company whose shares will trade on the New York Stock Exchange under the symbol FCA and recapitalize the company's debt.
"I am delighted with these results. We are now looking forward to the completion of this project, which has been on the drawing board since the acquisition of all of the equity interest in Chrysler Group," said Fiat Chairman John Elkann. "The listing on the New York Stock Exchange will give proper relevance to the importance of the Group's activities in the U.S. market and make our financing activities more efficient."
Even though Chrysler was absorbed by Fiat earlier this year the transaction's closing will give the new company better access to financial markets and help restructure its debt. Fiat SpA will cease to exist.
FCA will be the world's seventh-largest automaker. However, it is only a small player in China and India and Fiat is struggling in Europe.
Marchionne outlined an ambitious, five-year, 48 billion-euro plan in May that depends on a massive overhaul of the company's European operations and rapid growth for its Alfa Romeo, Maserati and Jeep brands.
The challenge now is to execute. Marchionne wants FCA's global sales to grow from 4.4 million vehicles in 2013 to 7 million by 2018.
FCA will be incorporated in the Netherlands and headquartered in London. Marchionne has said operations of Fiat in Italy and Chrysler in Auburn Hills will be largely unaffected by the corporate reshuffling.
Friday he thanked Fiat shareholders who accepted shares in FCA rather than sell.
"I am reassured by the fact that the vast majority of our equity holders have remained loyal and committed shareholders," Marchionne said in a statement. "Their belief in and support of the strategic plan we laid out for the next five years is of crucial importance as we embark on the execution phase which will dramatically improve the market positioning of our group and our brands."
A final tally will be released by Sept. 4, but Fiat said, "Based on the notices and confirmations received, Fiat has determined that the 500 million euro cap has not been exceeded."
Investors who oppose the deal have until Oct. 4 to sell their shares.
Following the news, shares of Fiat SpA remained unchanged Friday at 7.44 euros. The company's shares dropped to a low of 6.47 euros in recent weeks as concerns surfaced about the merger.
Marchionne is hoping to list stock of the company on the NYSE where the company hopes it attract more investors by mid-October.
Fiat became Chrysler's controlling shareholder in June 2009 when the Auburn Hills automaker emerged from a U.S. taxpayer funded bankruptcy. Fiat acquired all of Chrysler's remaining shares in January.
Contact Alisa Priddle: 313-222-5394 or firstname.lastname@example.org. Follow her on Twitter @AlisaPriddle
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