Friday, 10 January 2014

Merged Fiat-Chrysler Company May Be Listed in NYSE and Based in U.S., Report Says

Fiat’s recent acquisition of 100 percent of Chrysler has eliminated a major hurdle that prevented the two carmakers from merging into a single global automotive player. However, even though the Italian company has bought the American one, the seat of power of the new merged company may move to the U.S. rather than remain in Italy.

This hypothesis is supported by a Reuters report that quotes two sources close to Fiat as saying the merged company is likely to move its primary listing to New York as early as 2015. That would clearly indicate a shift of focus that reflects the operating facts.

Had Fiat not owned a majority stake in Chrysler, the Italian carmaker would have posted a €501 million ($690 million) loss in the first half of 2013 instead of a €435 million ($593 million) profit. Slumping sales in Europe have seriously affected Fiat, whose plants in Italy work at only 41 percent capacity.

Analysts say that listing the new merged company at the New York Stock Exchange would allow Marchionne to convince a larger number of investors that the newly formed company can rival with GM and Ford.

A New York listing would likely mean that the global headquarters of the merged company would be in the U.S. as well, a move that will alarm the Italian government, which wants to protect jobs in the country.

Marchionne may follow a similar strategy for the merger as the one used to combine Fiat Industrial with CNH to create a U.S.-listed manufacturer of agricultural vehicles. CNH Industrial has a primary listing in New York and a secondary one in Milan. Fiat has declined to comment on what will happen to Fiat-Chrysler after the merger.

By Dan Mihalascu



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