Fiat eyes new company with GM Europe, Chrysler
Monday, May 4, 2009
ROME -- Fiat Group SpA confirmed Sunday it was in talks to acquire General Motor's European operations with the aim of possibly creating a new company to also include its newly acquired Chrysler automaker.
Combined, the new automaker would have $105 billion in annual revenue, Fiat said in a statement.
Fiat said it was 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 chief executive officer 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 "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, with attorneys for the U.S. auto manufacturer saying the company would file a motion to sell substantially all of its assets to the Italian automaker.
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.