Fiat’s merger with the Chrysler Group seems to be going well as the Italian company increased its overall stake in the Detroit automaker from 25 to 30 percent on Tuesday.
“The increase is the result of the Company’s achievement of the second of three performance-related milestones outlined in a recent amendment to its June 10 2009 Operating Agreement, which broadens the Chrysler Group-Fiat partnership and enhances Chrysler Group’s international market position,” Chrysler said in a press statement.
The milestone in question required Chrysler Group to achieve cumulative revenues of more than $1.5 billion (€1.04 billion) from sales made outside U.S., Canada and Mexico (NAFTA countries) after June 10 2009, plus Fiat agreeing to the three following conditions:
– at least 90 percent of Fiat dealers in Brazil to distribute one or more Chrysler products (including rebadged products sold under the brands of Fiat Group);
– at least 90 percent of Fiat dealers in the European Union (EU) to distribute one or more Chrysler products (including rebadged products sold under the brands of Fiat Group) while also providing for the pooling of Chrysler Group and Fiat vehicle fleets in the EU for CO2 emissions ratings;
– an agreement providing for compensation to Chrysler for the use of its technology by Fiat or its affiliates outside of the NAFTA countries.
After Fiat’s move to increase its stake to 30 percent, the ownership interests of Chrysler Group’s members are as following: 59.2 percent for UAW VEBA, 30 percent for Fiat, 8.6 percent for the U.S. Treasury and 2.2 percent for the Canadian governments.
In order to further increase its Chrysler stake to 35 percent, Fiat must meet a third requirement, which states that it has to produce in the United States a 40 mpg car that would be based on a Fiat platform. The remaining 16 percent necessary for Fiat to control Chrysler will only be granted after a financial transaction.
