Fiat Plans to Acquire the Left Out Equity Interests in Chrysler Group
Fiat today announced their agreement with VEBA Trust, under which the Fiat North America, LLC (FNA) that is a fully owned subsidiary of Fiat, will also acquire the VEBA Trust’s equity interests in the Chrysler Group LLC. Currently about 41.46% of the Chrysler Group equities are not held by Fiat North America and this transaction is expected to be closed in the first quarter of 2014.Photo 1: FIAT
Against the sale of its interests in Chrysler Group, VEBA Trust will be receiving an aggregate consideration of about $3,650 million US dollars including the special payable distribution by the Chrysler Group to the members and the aggregate amount will come up to approximately $1,900 million. At the closing, FNA will also pay the remainder of about $1,750 million in cash purchase against consideration to the VEBA Trust.
The initial payment of the agreement will be made during the closing of the transaction with Fiat and additional payments will be done on the three consecutive years. Chrysler Group is expected to fund the initial contribution to the VEBA Trust from the available cash on hand. In consideration for these contributions, the UAW is also agreeable to certain commitments in order to continue supporting the industrial operations of the Chrysler Group and further implementation of Fiat-Chrysler alliance smoothly.Photo 2: Fiat Plans to Acquire the Left Out Equity Interests in Chrysler Group
This include to make use of the best effort in cooperatively rolling out Fiat-Chrysler World Class Manufacturing programs and also to actively participate in the benchmarking associated with the implementation and smooth run of these programs. This will cover objective performance assessments and also proper application of the WCM principles. These are meant to assist in the achievement of the group’s long-term business plans. Laos, the recent launches of the new car models including the new 2014 fiat panda has given a new hope to the company.