Merger News: Fiat Seals the Deal…Though I Doubt There Will Be Any Bragging Over Beers Later
Not sure if this should really be called merger news, but rather, government union news, or fire sale news, but I digress. It’s official – with the Supreme Court out of the way, Fiat has closed their “government brokered alliance” with Chrysler. As it stands, Fiat now controls 20% of Chrysler, with 55% controlled by the UAW. Assuming Chrysler meets standards predetermined by Fiat (including fuel-efficient vehicle development benchmarks), Fiat will increase its stake to 35% of the new Chrysler.
Now operating under its new name, Chrysler Group LLC, Chrysler will be led by Robert Kidder (chairman) and Fiat CEO Sergio Marchionne, who will oversee the day-to-day fun. Departing CEO, Robert Nardelli, brings with it the end of Chrysler’s private company status, as they were formerly owned by Cerberus Capital Management. They made a valiant effort, but at the end of the day, Cerberus fell just a touch short…you know, that touch like an older brother just touches his annoying little brother when they’re wrestling.
So what does it all mean? It means that Fiat now controls Chrysler, and the government can now focus on its BIG task, the GM bankruptcy proceedings and how best to maneuver that beast of burden. Best of luck team Obama; it’s about to get interesting.
