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Fiat to take 35% stake in Chrysler

21 January 2009 08:43 (UTC +04:00)

Baku. Nijat Mustafayev â€“ APA-Economics. Fiat is to take a 35 per cent stake in Chrysler as part of a deal between the Italian and US automakers as they seek to weather the severe downturn in the automotive industry.
Under terms of a pact that is being hammered out, Fiat is likely to take a 35% stake in Chrysler by the middle of this year. It would have the option of increasing that to as much as 55%, these people said.
Fiat, the stronger of the two, wouldn’t immediately put cash into Chrysler. Instead it would obtain its stake mainly in exchange for covering the cost of retooling a Chrysler plant to produce one or more Fiat models to be sold in the U.S., these people said. Fiat would also provide engine and transmission technology to help Chrysler introduce new, fuel-efficient small cars, they said.
The partnership would provide each company with economies of scale and geographical reach at a time when both are struggling to compete with larger and more global rivals like Toyota Motor Corp., Volkswagen AG and the alliance of Renault SA and Nissan Motor Co.