At a shareholders meeting earlier in August to approve the reorganization of the company, a majority of stockholders approved the plan, but under Italian law those who were entitled to the opportunity to tender their shares to Fiat. The so-called cash exit rights were limited by the company to €500 million. Had more shares than that been tendered, the merger would have been cancelled.
Fiat’s CEO Sergio Marchionne has plans to spend about $63 billion on a five-year business plan that includes boosting sales of Chrysler’s Jeep brand and bringing back Fiat’s Alfa Romeo luxury brand. Marchionne has said that once the IPO is completed FCA will hit up the bond market for capital. He has rejected the idea of issuing more stock, at least in the near term.
Chrysler’s Jeep and Ram pickup truck brands have led a resurgence at the company and the strategic plan is to improve on that performance. The new Jeep Cherokee has led the sales improvement this year, up 44% through July. Ram pickup sales are up 22% year-over-year. Total company sales are up 13% year-over-year, and August sales are projected to rise by 11% when the numbers are reported next week.
Chrysler sold a total of around 4.4 million vehicles worldwide last year, well behind the WardsAuto’s top three: Toyota Motor Corp. (NYSE: TM) with 9.9 million units sold, Volkswagen with 9.73 million units sold and General Motors Co. (NYSE: GM) will 9.71 million units sold. By 2018 Marchionne wants FCA to sell 7 million units.
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