Fiat investors approve Chrysler merger

Fri Aug 1, 2014 1:09pm EDT
 
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By Agnieszka Flak

TURIN Italy (Reuters) - Fiat FIA.MI shareholders approved the Italian carmaker's merger with its U.S. unit Chrysler on Friday, paving the way for a U.S. listing which the world's seventh-biggest auto group hopes will help fund an ambitious turnaround plan.

Fiat Chief Executive Sergio Marchionne completed the full buyout of Chrysler earlier this year and wanted to incorporate the businesses as a Dutch-registered combine, Fiat Chrysler Automobiles (FCA). The vote to create FCA was approved by the required two-thirds majority of shareholders present.

Around 8 percent of all of Fiat's investors voted against the merger and should enough of them exercise their rights to sell out within two weeks, the merger could still fail.

Marchionne thinks the chances of the merger now failing are slim and he is counting on the U.S. listing to help foot the bill for a 48 billion euro ($64 billion) plan to grow net profit five-fold and sales by 60 percent by 2018.

Marchionne helped rescue Chrysler in 2009 and turned the U.S. firm into a key profit centre for Fiat, although quarterly results released on Wednesday disappointed.

The creation of FCA will help Marchionne ease his reliance on Europe and could convince investors that FCA can rival General Motors (GM.N: Quote) and Ford Motor Co (F.N: Quote).

"With today's meeting begins the future of our company," Chairman John Elkann, the grandson of late Fiat patriarch Gianni Agnelli, said at the start of the last shareholder meeting likely to be held in Italy.

The merger plan had raised concerns it would tighten the grip on the company by main shareholder Exor EXOR.MI, the holding company of the Agnelli family, via the creation of a scheme to reward long-term investors.   Continued...

 
A new Fiat Chrysler Automobiles sign is pictured after being unveiled at Chrysler Group World Headquarters in Auburn Hills, Michigan May 6, 2014. REUTERS/Rebecca Cook