Due to be rolled out in 2015, Chrysler's Ram ProMaster City small commercial van will be based on this truck-- the Fiat Doblò Cargo van, which was first designed for use in Europe.
Turin, Italy-based Fiat S.p.A announced on New Year’s Day that it will complete a full merger with its U.S. partner, Chrysler Group LLC —which has already been selling both Fiat-badged and Fiat-based vehicles for several years alongside its Chrysler, Dodge. Jeep and models in North America. In the commercial vehicle market, the Fiat link has to date provided Chrysler with two vans marketed under the Ram ProMaster name and a light-duty turbocharged diesel, which is also offered in Jeep models.
Under the terms for the merger, according to Fiat S.p.A., its wholly owned subsidiary Fiat North America LLC (FNA) will attain the remaining 41.4616% of Chrysler Group it does not currently hold.
Fiat said the deal is expected to close on or before January 20th.
The European car and truck OEM said the $3.65-billion deal includes a $1.75-billion cash payment for the 41% stake that has been held by the UAW’s VEBA healthcare fund for retirees ever since Chrysler's bankruptcy proceedings, per an Agence France-Presse (AFP) news report by Dario Thuburn.
That’s because, as stated by Fiat S.p.A. in a news release, part of the merger deal calls for Chrysler Group to provide “additional contributions” of $700 million to the aforementioned UAW fund in four equal annual installments.
Still, Seeking Alpha said the figure “came in below what analysts thought it would take to get a UAW healthcare trust to sign off on.”
WSJ reported that Fiat acquiesced to pony up the $4.35 billion to assume the 41.5% stake in Chrysler held by the United Auto Workers Retiree Medical Benefits Trust.
“The initial [annual contribution] payment [by Chrysler] will be made on closing of the transaction with Fiat and additional payments will be payable on each of the next three anniversaries of the initial payment,” noted Fiat S.p.A.
The corporate parent added that Chrysler Group expects to fund the initial contribution to the union healthcare trust from available cash on hand.
Likewise, Fiat along with its Chrysler business unit expect to fund the main $3.65-billion cost of the merger with “available cash on hand.”
“The deal ends a long-running dispute over the valuation of the U.S. carmaker, which is just over $10 billion under the agreement,” WSJ pointed out. “It also provides Fiat with full control and helps pave the way for the consolidation of the companies. In addition, the transaction means that Chrysler's prospective IPO will probably be called off.”
“Chrysler's profits have been keeping Fiat buoyant in recent years amidst a deep downturn in Europe, and Marchionne has been steadily expanding Fiat's stake in Chrysler,” noted AFP reporter Thurban in his news story.
News of the deal drove up shares of Fiat S.p.A. by 12.45% in trading this morning in Milan. At this writing, the Italian firm’s shares are up 13.31%, trading at $9.40.
“I have been looking forward to this day from the very moment that we were chosen to assist in the rebuilding of a vibrant Chrysler back in 2009.” said John Elkann, chairman of Fiat.
Sergio Marchionne, Fiat’s chief executive and chairman & CEO of Chrysler, observed the merger of will “go down in the history books.”
“The [merger’s] unified ownership structure will now allow us to fully execute our vision of creating a global automaker that is truly unique in terms of mix of experience, perspective and know-how, a solid and open organization that will ensure all employees a challenging and rewarding environment,” Marchionne added.