Fiat is known throughout Europe, and indeed much of the world, as a formidable manufacturer producing quality products at a reasonable price. However, this successful company also has quite a bite when it comes to any competition or position of strength. In a recent deal the car manufacturer is going after a huge 6% stake in the American Chrysler group. With such a purchase the previous stakes of 26% will be pushed into a controlling stake in the company
In the world of merges, acquisitions, and stock options, knowing which company has controlling shares and who is looking to gain such positions can be of great benefit. Previous to the arrangement the US treasury had the 6% stake in the company. After the successful application of the bailout only a few years before, the treasury received billions in the repayment. It offered with company a grant opportunity to expand and utility acquire much of grand position it held before.
From the end of the financial crisis, the treasury has been trying to sell the nearly 100,000 shares of the company it held. While Fiat still owes billions in loans to Canadian and US investors, the purchase is believe to place it in a very strategic position within the North American markets- one that has been part of its plans for many years now.
Fiat-Chrysler CEO had openly admitted that there may be an opportunity to merge the two companies, ultimately fusing the auto markets under a single headquarters. As the CEO has mentioned, this move however was intimately tried in with the sale of 6.6 million vehicles set to be sold by 2014. The present position falls short of the number at 3.6 million, however with this new endeavor and strategic policies set in motion, it will be likely that the projections shall be matched.
Even more surprising is that Fiats domination does not end there as the company is furthering its ambitions with another % stake in Chrysler by the years end. This increase is hoped to conclude with the release of a fuel-efficient Dodge model, a goal that has been intimately linked with the overarching structure the company has applied in recent months.
Whether the future may be, fiat is on the quick path to automotive domination. While its conquest of Chrysler has been seen by many as bold, its ultimate goal of vehicle domination will be interesting to observe as it develops before our eyes.