Fiat’s Board of Directors approved today a proposal calling for a corporate reorganization and the formation of Fiat Chrysler Automobiles.
“A new chapter of our story begins with the creation of Fiat Chrysler Automobiles,” says John Elkann, chairman of Fiat. “A journey that started over a decade ago, as Fiat sought to ensure its place in an increasingly complex marketplace, has brought together two organizations each with a great history in the automotive industry and different, but complementary, geographic strengths. FCA allows us to face the future with a renewed sense of purpose and vigor.”
Under the proposal, Fiat shareholders will receive one FCA common share — listed on the New York Stock Exchange with an additional listing on the Mercato Telematico Azionario in Milan — for each Fiat share they hold.
The board also hopes to establish Fiat Chrysler Automobiles N.V. in the Netherlands, as the parent company of the group.
“While Auburn Hills will no longer have bragging rights to Chrysler being headquartered in our city, the relocation of the headquarters is symbolic rather than economic in terms of impact,” says Pete Auger, city manager of Auburn Hills. “The heart, soul, creative, and intellectual engine of a tremendous automotive company remain in Auburn Hills. We congratulate the newly formed Fiat Chrysler Automobiles and look forward to their continuing contributions as a vital member of the Auburn Hills community.”
The proposed transaction — subject to approval of the final documentation by the board and shareholders — is expected to be completed by the end of the year.
In related news, Chrysler Group reported $1.8 billion in 2013, up 9 percent from $1.7 billion in 2012. The company says its fourth quarter adjusted net income was $659 million, a 74 percent increase over the same period in 2012, primarily driven by an increase in sales of the Jeep Grand Cherokee, Jeep Cherokee, and Ram pickup trucks.
Chrysler’s parent company, Italy’s Fiat SpA, reported a net profit of 1.95 billion euros ($2.67 billion) for the year, up from 896 million euros in 2012.
“The 2013 year-end financial results reflect the commitment Chrysler Group has made to rapidly refresh our product lineup with vehicles that achieve exacting performance standards,” says Sergio Marchionne, chairman and CEO of Chrysler and Fiat.