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Fiat, GM dissolve their partnership

14 February 2005

GM and Fiat have reached a settlement to terminate their 5-year partnership and realign their industrial relationship. Under the deal, GM will pay Fiat €1.55 billion and will return its 10% stake in Fiat. In exchange, Fiat gave up a put option to force General Motors to buy the unprofitable Fiat Auto. GM will also acquire an interest in key strategic diesel engine assets and other rights with respect to diesel engine technology and know-how.

The most significant elements of the settlement agreement are as follows:

The companies will continue cooperation through long-term agreements to supply each other with powertrains, continued cooperative development of certain vehicle programs and through Fiat’s participation in GM’s purchasing alliance program, said GM.

Source: GM (press release)