Fiat eyes new company with GM Europe, Chrysler
Fiat Group SpA confirmed that it is in talks to buy General Motors' European operations, in a move that, combined with its planned takeover of Chrysler LLC, would form one of the world's biggest car and truck makers.autos Updated: May 04, 2009 07:28 IST
Fiat Group SpA confirmed Sunday that it is in talks to buy General Motors' European operations, in a move that, combined with its planned takeover of Chrysler LLC, would form one of the world's biggest car and truck makers.
The new auto manufacturer would have $105 billion in annual revenue, Fiat said in a statement.
Fiat said it is evaluating the possible spinoff of its auto business to form the core of the new company. Fiat Group Automobiles includes the Fiat, Alfa Romeo and Ferrari brands. The statement was issued on the eve of a meeting in Berlin between Fiat Group CEO Sergio Marchionne and the German economy and foreign ministers to discuss Fiat's offer for GM's German unit, Opel.
GM Europe also includes the British company Vauxhall and the Swedish carmaker Saab.
GM has been trying to find investors for its noncore and unprofitable assets as part of a restructuring in which it has sought billions of dollars in aid from the U.S. government to avert collapse.
Opel has said it needs $4.3 billion to get through the economic crisis. The German government has said it doesn't foresee giving direct state aid. Chancellor Angela Merkel has suggested the government could help an Opel investor with loan guarantees. Fiat said that over the next few weeks, Marchionne will be looking "to assess the viability of a merger of the activities of Fiat Group Automobiles (including the interest in Chrysler) and General Motors Europe into a new company."
"As part of this process, the group would evaluate several corporate structures, including the potential spinoff of Fiat Group Automobiles and the subsequent listing of a new company which combines those activities with the activities of General Motors Europe."
In an interview Sunday with Corriere della Sera, Fiat Chairman Luca Cordero di Montezemolo called GM's Opel an "ideal partner" and a possible takeover by Fiat an "extraordinary opportunity." Fiat is not the only suitor for Opel, however.
Last week, Canadian car parts maker Magna International Inc. presented German Economy Minister Karl-Theodor zu Guttenberg
with what the minister called a "rough concept for a commitment with Opel." Guttenberg has said the German government would wait to determine its role in any full or partial Opel sale until after the U.S. government had weighed in.
Fiat, meanwhile, has pressed ahead with a takeover of Chrysler. Chrysler filed a motion Saturday to sell substantially all of its assets to Italian automaker Fiat, but the ailing automaker must still deal with creditors who refused to come to a deal to erase the company's debt.
In addition to Fiat Group Automobiles, the Fiat Group also includes its agricultural vehicles branch CNH and its Iveco trucking unit, as well as a media arm.