“In the life of every major organization and its people, there are defining moments that go down in the history books,” says Sergio Marchionne, the chief executive of both Fiat and Chrysler. He continues, “For Fiat and Chrysler, the agreement just reached with the VEBA is clearly one of those moments,” of the recently closed deal that would allow Fiat access to Chrysler and its assets.
According to Bloomberg, “Fiat SpA (F) secured full ownership of Chrysler Group LLC in a $4.35 billion agreement that will conserve the Italian company’s cash while creating a global carmaker with better scale to take on General Motors Co. (GM).” This deal has been in the works since Turin-based Fiat helped rescue Chrysler from bankruptcy almost five years ago. The Economist calls Chrysler Fiat’s “American ally,” and suggests that this major deal between the two companies was inevitable. Fiat initially acquired a 20% stake in Chrysler back in 2009, which it has been slowly increasing ever since.
Ron Bloom of the investment firm Lazard, headed by CEO Kenneth Jacobs, reportedly gave counsel to Fiat on the recent transaction, which experts predict will only result in better business for the company. According to Bloomberg, “Fiat already relies on Chrysler to sustain profit amid losses in Europe,” so a merger will likely help the company rank higher in global automotive deliveries. A report from The Economist concurs, adding “Analysts suggest that the deal with prove critical to transforming both Chrysler, the smallest of Detroit’s Big Three carmakers, and Fiat, a struggling European company, into a true global powerhouse.” With Marchionne at the helm, and this new deal finalized, the future looks bright for the automotive company.