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Fiat and Chrysler have entered into a strategic alliance following the decision by the American firm to file for bankruptcy protection.
Chrysler entered discussions with Fiat over a year ago and the deal has been expected for some time. Through the agreement, Chrysler says it will now be able to expand its product range and create more environmentally-friendly cars.
Under the alliance, Fiat will hold a 20 per cent stake in Chrysler, the Voluntary Employee Beneficiary Association will own a 55 per cent share, and the US and Canadian governments will own proportionate shares of a 10 per cent stake.
Fiat will be able to increase its ownership stake by an additional 15 per cent in three stages by meeting different criteria:
- 5 per cent for bringing a 40mpg platform to Chrysler that will be produced in the US
- 5 per cent for producing a fuel-efficient engine family for Chrysler that will be made in the US
- 5 per cent for providing Chrysler access to its global distribution network to help export Chryslers
Bob Nardelli, Chairman and CEO of Chrysler, said: "This partnership transforms Chrysler into a vibrant new company with a wealth of strategic advantages.
“It enables us to better serve our customers and dealers
with a broader and more competitive line-up of environmentally-friendly, fuel-efficient high-quality vehicles. Benefits to the new company include access to exciting products that complement our current portfolio, technology cooperation and stronger global distribution."
(Autocar India)
Chrysler entered discussions with Fiat over a year ago and the deal has been expected for some time. Through the agreement, Chrysler says it will now be able to expand its product range and create more environmentally-friendly cars.
Under the alliance, Fiat will hold a 20 per cent stake in Chrysler, the Voluntary Employee Beneficiary Association will own a 55 per cent share, and the US and Canadian governments will own proportionate shares of a 10 per cent stake.
Fiat will be able to increase its ownership stake by an additional 15 per cent in three stages by meeting different criteria:
- 5 per cent for bringing a 40mpg platform to Chrysler that will be produced in the US
- 5 per cent for producing a fuel-efficient engine family for Chrysler that will be made in the US
- 5 per cent for providing Chrysler access to its global distribution network to help export Chryslers
Bob Nardelli, Chairman and CEO of Chrysler, said: "This partnership transforms Chrysler into a vibrant new company with a wealth of strategic advantages.
“It enables us to better serve our customers and dealers
with a broader and more competitive line-up of environmentally-friendly, fuel-efficient high-quality vehicles. Benefits to the new company include access to exciting products that complement our current portfolio, technology cooperation and stronger global distribution."
(Autocar India)
