Fiat boosts stake in Chrysler to 58.5% after achieving fuel economy and production commitment milestone with the new Dart
Fiat has boosted its interest in the Chrysler Group by another 5% following Chrysler’s achievement of the “Ecological Event”—receiving regulatory approval for an automobile based on a Fiat platform or vehicle technology having a fuel efficiency rating of at least 40 combined miles per gallon (5.88 L/100km) and to irrevocably commit to begin assembly in commercial quantities in the US. (Earlier post.)
The increase is effective immediately, and brings Fiat’s interest in Chrysler to 58.5%. The remaining 41.5% of Chrysler’s equity is owned by VEBA.
In late December, Chrysler achieved the Fuel Economy Test for an unadjusted combined rating of 40 mpg with a pre-production version of the Dodge Dart, based upon Fiat architecture technology. (Earlier post.) Yesterday, Chrysler issued an irrevocable commitment to the US Department of the Treasury to begin assembly of such vehicle in a production facility located in the United States.
The all-new Dodge Dart will be made in the United States at Chrysler Group’s Belvidere Assembly Plant in Belvidere, Ill. The Dodge Dart is scheduled to be unveiled at the North American International Auto Show in Detroit on 9 January.
The acquisition of a further 5% of Chrysler is a fundamental step in completion of the integration between our two groups.—Fiat S.p.A. and Chrysler Group CEO, Sergio Marchionne
This is the fifth time in the past year that Fiat has increased its ownership in Chrysler Group. In June 2009, Fiat initially received a 20% stake in Chrysler Group in exchange for sharing intellectual property and other resources with the Company.
On 10 January 2011, Fiat announced that its stake in the Company increased to 25% when Chrysler Group received the appropriate government approvals and committed to begin commercial production of the Fully Integrated Robotized Engine (FIRE) in its Dundee, Mich., facility.
On 12 April, Fiat’s ownership in Chrysler Group increased to 30% as Chrysler Group achieved cumulative revenue of more than $1.5 billion attributable to Company sales made outside of Canada, Mexico and the United States and entered into distribution agreements in Brazil and Europe, as well as a technology-use agreement.
In connection with Chrysler Group refinancing and paying back its US and Canadian government loans in full on 24 May, six years early, Fiat exercised its call option to increase its ownership interest in Chrysler Group by an incremental 16% to 46%, on a fully diluted basis.
On 21 July, Fiat reported that it paid $500 million to purchase the US Treasury’s remaining 6% (fully diluted) ownership interest in Chrysler Group and $125 million to purchase the Canadian governments’ remaining 1.5% (fully diluted) ownership interest, bringing its fully diluted ownership interest to 53.5%. In addition, Fiat paid $75 million to obtain assignment of the US Treasury’s rights under the Equity Recapture Agreement.