Fiat to Take 35% of Chrysler

Jan. 20, 2009
Companies will exchange technology

Fiat and Chrysler have signed a preliminary deal for a strategic alliance whereby Fiat would receive 35% of Chrysler in exchange for technology, the two sides said on Jan. 20.

Under the non-binding deal, Fiat would contribute vehicle assets and technology "to expand Chrysler's current product portfolio" and would offer access to new markets.

Press reports had suggested earlier that a transfer of technology by Fiat would be aimed specifically at enabling crisis-hit Chrysler to develop quickly a complete range of small, front-wheel-drive and low-carbon emission vehicles.

Fiat said on the agreement with Chrysler's main shareholder, Cerberus Capital Management: "The alliance does not contemplate that Fiat would make a cash investment in Chrysler or commit to funding Chrysler in the future."

The Chrysler group has just received conditional U.S. state aid of $5.5 billion dollars. Referring to conditions laid down by U.S. authorities, the statement said that Fiat would help Chrysler draft a viability plan for the US treasury, commenting that Fiat had restructured successfully in recent years and was a "recognized world leader" in innovative and environmentally-friendly vehicles.

"The proposed alliance would satisfy conditions laid down by the US treasury and all parties would be "asked to contribute to Chrysler's restructuring effort," the statement said, referring to lenders, employees, the UAW union in the United States, and dealers and suppliers.

Copyright Agence France-Presse, 2009

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