Fiat Chrysler Automobiles Debuts On Wall Street
Fiat Chrysler Automobiles is finally official. While the marriage of Fiat SpA and Chrysler was recognized on paper earlier this year, the new company has now made it’s Wall Street debut, giving North American investors a chance to own a piece of the Chrysler comeback story.
The merger is the result of a decade-long project headed by CEO Sergio Marchionne that involved a great deal of clever deal making and difficult restructuring.
Fiat took control of Chrysler with a minority stake in 2009, as the automaker emerged from government-sponsored bankruptcy during the financial crisis. It completed it’s buyout of Chrysler this year. Ironically, Chrysler is now quite profitable, while Fiat is struggling. Now all of the businesses are one, with a new name- Fiat Chrysler Automobiles, with operations centres in Detroit and in Turin. This merger makes FCA the seventh-largest automaker in the world. The company’s brand portfolio also includes Maserati, Ferrari, Jeep, Dodge, Ram and Alfa Romeo.
Through the company’s debut on the stock market, FCA will now have access to the world’s biggest equity market and the cheap funding it offers, to fund Marchionne’s ambitious five-year strategy announced earlier this year. The company plans to launch dozens of new models across all brands, from tiny Fiats to luxurious Maseratis. The company is hoping to boost sales by 60 percent, to 7 million vehicles by 2018. Marchionne plans to step down from his role at the head of the company once he sees through this 5-year plan.
Chrysler is the main profit centre for the automotive group, with strong sales in the United States. In North America last month, FCA outsold Toyota, the world’s largest automaker.
“We are predominantly a U.S. automaker with operations in foreign countries.” Marchionne said. “Half of our car volumes are in the United States. I want this to be a U.S.-listed company.”
The stock opened on the New York Stock Exchange at $9 (U.S.) per share. The timing of the Wall Street launch was deliberate. It is the day that Christopher Columbus’ arrival in America is celebrated.
By Linda Aylesworth – car-news.ca