The Fiat Group will take up 35% stake in Chrysler as a deal between the two automotive manufacturers. The two companies announced on Tuesday that the duo have signed the “non-binding term sheet to establish a global strategic alliance.â€
The alliance, to be a key element of Chrysler’s viability plan, will provide Chrysler with access to fuel-efficient vehicle platforms, powertrain and components to be produced at Chrysler manufacturing sites. Fiat will also provide distribution capabilities, as well as cost savings opportunities.
As a consideration for Fiat Group’s contribution to the alliance of assets, to include: product and platform sharing, including city and compact segment vehicles, to expand Chrysler’s current product portfolio; technology sharing, and access to additional markets, including distribution for Chrysler vehicles in markets outside of North America, Fiat will receive an initial 35 percent equity interest in Chrysler. The alliance does not contemplate that Fiat will make a cash investment in Chrysler or commit to funding Chrysler in the future.
“This initiative represents a key milestone in the rapidly-changing landscape of the automotive sector. The agreement will offer both companies opportunities to gain access to automotive markets with friendly product offerings,†said the CEO of Fiat Group, Sergio Marchionne said.
