Fiat Group and Chrysler announce global strategic alliance
21 January 2009
Fiat S.p.A., Chrysler LLC and Cerberus Capital Management L.P., the private investment majority owner of Chrysler, have signed a non-binding agreement to establish a global strategic alliance. Under the deal, Fiat would receive a 35% stake in Chrysler.
The Fiat Group’s contribution to the alliance would include:
- product and platform sharing, including city and compact segment vehicles, to expand Chrysler’s current product portfolio;
- technology sharing, including fuel efficient and environmentally friendly powertrain technologies;
- access to additional markets, including distribution for Chrysler vehicles in markets outside of North America.
As a consideration for the Fiat Group’s contribution, Fiat would receive an initial 35% equity interest in Chrysler. Fiat will not make a cash investment in Chrysler or commit to funding Chrysler in the future.
The alliance, to be a key element of Chrysler’s viability plan, would provide Chrysler with access to competitive, fuel-efficient vehicle platforms, powertrain, and components to be produced at Chrysler manufacturing sites. Fiat would also provide management services supporting Chrysler’s submission of a viability plan required by the US Treasury.
The proposed alliance would be consistent with the terms and conditions of the US Treasury financing to Chrysler. Per the US Treasury loan agreement, each constituent will be asked to contribute to Chrysler’s restructuring effort including: lenders, employees, the UAW, dealers, suppliers and Chrysler Financial. Completion of the alliance is subject to regulatory approvals, including the US Treasury.