NEWS
Fiat bids Italy arrivederci
Italian automotive icon relocates to lower tax and improve communicationsThe company that most represented post-war Italy to the world in the 1960s and 1970s has abandoned the country. Fiat, the maker of Fiat, Lancia, Alfa Romeo, Maserati, is no longer an Italian company.
Fiat shareholders on Friday formally agreed to abandon its traditional and emotional home in the Italian industrial centre of Torino to merge the company with Chrysler, creating the world's seventh-largest car company.
The move will see the birth of a new company, Fiat Chrysler Automobiles NV, which will be legally based in the tax haven of The Netherlands, listed on the New York Stock Exchange and will have its head office in London, England.
Fiat has been the industrial and cultural driver of life in Torino for the past 115 years, but that is all in the past now that CEO Sergio Marchionne has won shareholder approval for the merger and relocation, both of which were put to the board during an extraordinary general meeting.
Even so, Marchionne is on record as pledging to keep all present Fiat, Maserati and Alfa Romeo factories in Italy open and Fiat has been definite about keeping its admin and technical sectors in Torino, while Marchionne (pictured) has committed to rehiring 30,000 Fiat Group plant workers. He will keep them occupied with traditional Fiat Group products as well as the Jeep Renegade and other Chrysler models.
"With this meeting begins the future of our company," John Elkann, Fiat Chairman, and grandson of legendary Fiat figure, Gianni Agnelli, said at Fiat's last Italian shareholder's meeting on Friday.
Despite fears in the Italian press that the Agnelli family, whose family's holding company, Exor, owned 30.04 percent of Fiat would use the merger and the NYSE listing as an opportunity to sell out of the struggling, but storied company, Elkann insisted it was staying.
"I want to confirm today my own and my family's commitment to continue to support FCA, even more so now that there are big opportunities on the horizon.
"For the first time we have a different perspective: we don't need to play a game of survival," Elkann said.
The meeting wasn't completely smooth sailing, with roughly eight percent of Fiat shareholders voting against the merger, but it easily achieved the two-thirds majority required. However, if exit rights (worth €7727 per share) are taken up by all those who voted "no", the merger could still fail, with Fiat setting a €500 million ceiling to pay them out.
All Fiat shareholders will be able to swap each Fiat share they hold for an FCA share and most will also receive special voting shares that won't be listed.
Oddly, Marchionne has already admitted that the merger wouldn't deliver significant synergistic savings.
While Exor holds the largest stake in the new company, the People's Bank of China owns two percent of FCA, which will help FCA push into emerging markets.
Fiat has already announced plans to invest €55 billion over the next five years to compete with the likes of Toyota, GM, Ford and Volkswagen, and boost sales to seven million cars a year by 2018.
Though Fiat itself has been strong in South America and Italy, it has been badly hurt in the European slowdown and just five years after taking control of Chrysler, its North American operation delivers more than 60 percent of its profit.
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Written byMichael Taylor
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If the price does not contain the notation that it is "Drive Away", the price may not include additional costs, such as stamp duty and other government charges.
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