The Truth About Cars » fiat chrysler merger http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Thu, 04 Dec 2014 19:13:59 +0000 en-US hourly 1 http://wordpress.org/?v=4.0.1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » fiat chrysler merger http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com Marchionne’s Choice of Fiat-Chrysler HQ Weighs Political Realities Against Lower Taxes http://www.thetruthaboutcars.com/2014/01/marchionnes-choice-of-fiat-chrysler-hq-weighs-political-realities-against-lower-taxes/ http://www.thetruthaboutcars.com/2014/01/marchionnes-choice-of-fiat-chrysler-hq-weighs-political-realities-against-lower-taxes/#comments Wed, 29 Jan 2014 15:55:25 +0000 http://www.thetruthaboutcars.com/?p=726994 Now that Sergio Marchionne has succeeded in joining Fiat and Chrysler together, for his next act he’s planning on moving Fiat’s headquarters out of Italy. While such a move has tax advantages, it would present a political and public relations challenge for Fiat and Marchionne in their home country. According to Reuters, the new entity, […]

The post Marchionne’s Choice of Fiat-Chrysler HQ Weighs Political Realities Against Lower Taxes appeared first on The Truth About Cars.

]]>
19e1m34hoia1ojpg

Now that Sergio Marchionne has succeeded in joining Fiat and Chrysler together, for his next act he’s planning on moving Fiat’s headquarters out of Italy. While such a move has tax advantages, it would present a political and public relations challenge for Fiat and Marchionne in their home country. According to Reuters, the new entity, dubbed Fiat Chrysler Automobiles, will be a Dutch-based company with a UK tax domicile, while shares are listed on the NYSE with a secondary listing in Milan.

Marchionne is aware that locating the headquarters outside of Italy, where Fiat has operated for 115 years and has received government funding, or outside the United States, where Chrysler was bailed out by the federal government, could make waves and there is the possibility that the Italian government might intervene. “I’ve seen weirder things happen,” Marchionne said to journalists at the recent Detroit auto show. “So I sincerely hope they don’t create obstacles.”

The deal for Fiat to take complete control of Chrysler after buying the UAW retiree health benefits trust’s stake in the Auburn Hills based automaker was consummated last week and the result is the world’s 7th largest automaker, holding brands that include ,Alfa Romeo, Dodge, Ferrari, Jeep and Maserati along with the two corporate brands.

Marchionne is emulating what he did when he spun off CNH Industrial from Fiat: register the group in the Netherlands with a UK tax domicile. Marchionne has previously said that CNH Industrial will be used as “one of the technical blueprints” for Fiat-Chrysler. CNH is registered in the Netherlands, tax-resident in Britain and traded primarily on the New York Stock Exchange, with a secondary listing in Milan.

Marchionne, who trained as a tax accountant before attending law school by training, will present his plans to the Fiat board of directors today. Publicly he has insisted that moving the HQ and listing on the NYSE reflect “access to funding” more than tax considerations, saying that profits are taxed where they are made with “no impact” on the Italian government’s tax revenue. Because of tax credits for previous years’ losses, Fiat will not have to pay domestic Italian taxes for years to come. Still, to reduce tax burden, manufacturers can adjust the amounts of total profit attributed to the production, export or sale of each vehicle in different countries.

 

The post Marchionne’s Choice of Fiat-Chrysler HQ Weighs Political Realities Against Lower Taxes appeared first on The Truth About Cars.

]]>
http://www.thetruthaboutcars.com/2014/01/marchionnes-choice-of-fiat-chrysler-hq-weighs-political-realities-against-lower-taxes/feed/ 22
Fiat Completes Acquisition of Chrysler, Marchionne Open to Other Partners http://www.thetruthaboutcars.com/2014/01/fiat-completes-acquisition-of-chrysler-marchionne-open-to-other-partners/ http://www.thetruthaboutcars.com/2014/01/fiat-completes-acquisition-of-chrysler-marchionne-open-to-other-partners/#comments Wed, 22 Jan 2014 13:00:42 +0000 http://www.thetruthaboutcars.com/?p=704618 Fiat announced that it has completed the acquisition of all remaining shares in Chrysler Group that it did not own. The United Auto Workers’ retiree healthcare trust, known as a voluntary employee beneficiary association or VEBA, received $3.65 billion in cash for its 41.46% stake in the Auburn Hills based automaker, $1.9 billion of which […]

The post Fiat Completes Acquisition of Chrysler, Marchionne Open to Other Partners appeared first on The Truth About Cars.

]]>
chryfiat

Fiat announced that it has completed the acquisition of all remaining shares in Chrysler Group that it did not own. The United Auto Workers’ retiree healthcare trust, known as a voluntary employee beneficiary association or VEBA, received $3.65 billion in cash for its 41.46% stake in the Auburn Hills based automaker, $1.9 billion of which came from Chrysler and $1.75 billion from Fiat. The total deal is worth $4.35 billion, with Chrysler committed to pay the trust the remaining $700 million in four annual equal payments, the first of which was made when the deal was consummated.

The closing of the deal took place after a year and a half of negotiations, lawsuits and the threat of an initial public offering of Chrysler stock, but Sergio Marchionne has finally realized his ambition to combine Fiat and Chrysler. That gives Fiat access to Chrysler’s profits, needed to shore up the Italian automaker which is overexposed to the weak European market. Fiat projects spending as much as 9 billion euros ($12 billion) on investments in its Italian factories revamping its aging product lineup.

Fiat chairman John Elkann told reporters at the Detroit auto show last week that Marchionne, 61, will remain CEO through at least 2016 to manage what will now be the world’s 7th largest car company. The two companies sold about 4.4 million vehicles combined last year.

Fiat’s board of directors will meet at the end of January work out the details of the merger, including how the joint corporation will be organized, where the headquarters will be, and on which stock exchange the company will list its main stock listing, Elkann said. He also said that the merged company’s name will include both Fiat and Chrysler. At the Detroit show last week Marchionne said that the U.S. has a “large claim” as the location of the future headquarters, and that he prefers the New York Stock Exchange as the primary listing for the group. Marchionne also said that once the merger is complete, he would be open to additional partnerships with other automakers, such as PSA Peugeot Citroen and Suzuki though there is less urgency now that the merged company has “the credentials to be at the table” with top global automakers.

The post Fiat Completes Acquisition of Chrysler, Marchionne Open to Other Partners appeared first on The Truth About Cars.

]]>
http://www.thetruthaboutcars.com/2014/01/fiat-completes-acquisition-of-chrysler-marchionne-open-to-other-partners/feed/ 24
Fiat Resumes Negotiations to Buy Rest of Chrysler from UAW VEBA http://www.thetruthaboutcars.com/2013/12/fiat-resumes-negotiations-to-buy-rest-of-chrysler-from-uaw-veba/ http://www.thetruthaboutcars.com/2013/12/fiat-resumes-negotiations-to-buy-rest-of-chrysler-from-uaw-veba/#comments Mon, 23 Dec 2013 12:30:14 +0000 http://www.thetruthaboutcars.com/?p=686618 Bloomberg is reporting that Fiat CEO Sergio Marchionne has resumed talks with the UAW’s retiree health care trust (aka VEBA) to buy the 41.5% of Chrysler that the Italian automaker doesn’t yet own. Fiat executives met last week with the trust’s representatives. The proposed initial public offering of Chrysler stock has been delayed for tax […]

The post Fiat Resumes Negotiations to Buy Rest of Chrysler from UAW VEBA appeared first on The Truth About Cars.

]]>

Bloomberg is reporting that Fiat CEO Sergio Marchionne has resumed talks with the UAW’s retiree health care trust (aka VEBA) to buy the 41.5% of Chrysler that the Italian automaker doesn’t yet own. Fiat executives met last week with the trust’s representatives. The proposed initial public offering of Chrysler stock has been delayed for tax reasons until next year, creating a window of opportunity for a deal. Differing valuations on the stock prompted VEBA’s demand for the IPO, which would establish a market price for the stock, most likely more than Marchionne and the Agnelli family that controls Fiat want to pay.

Fiat recently upped its offer, the first it has made since August. That offer was rejected but apparently the parties are close enough that negotiations have resumed. According to Bloomberg’s sources, advisers to the IPO estimated a market valuation of approximately $10 billion for Chrysler. Based on those estimates, Fiat is said to be offering about $4.2 billion, while the trust wants at least $5 billion. While $800 million is still a lot of money, the two parties are closer than ever before. Fiat does have the right to buy the remaining stake for about $6 billion so it’s not as though a corporate raider is going to swoop in and snatch the rest of Chrysler from Marchionne’s grasp, but the Fiat CEO doesn’t want to overpay.

Marchionne wants to merge Fiat and Chrysler to be able to compete with larger global rivals, and also so that Fiat can access Chrysler’s profits to help them weather the weakness of Fiat’s core market in Europe and develop replacements for their aging product line there. The more Fiat pays for the remaining share of Chrysler the less cash the merged company will have for product development on both sides of the Atlantic Ocean.

On the other side of the negotiating table, the health care trust is holding out for a maximum payout, particularly since a recent analysis says that their anticipated costs to provide health care to Chrysler UAW retirees will still exceed VEBA’s current assets including the 41.5% stake in Chrysler by more than $3 billion.

Representatives for Fiat and Chrysler officially declined to comment.

The post Fiat Resumes Negotiations to Buy Rest of Chrysler from UAW VEBA appeared first on The Truth About Cars.

]]>
http://www.thetruthaboutcars.com/2013/12/fiat-resumes-negotiations-to-buy-rest-of-chrysler-from-uaw-veba/feed/ 6