Fiat Chrysler Automobiles to be automaker's new name

New structure is designed to secure Fiat's and Chrysler's position as the world's seventh largest automaker.


Fiat and Chrysler now has a new name -- Fiat Chrysler Automobiles -- and its stock will be listed on the New York Stock Exchange if Fiat's shareholders approve a proposal from Fiat's board of directors.

The new name and the shareholder proposal, approved by the board of directors today, comes eight days after Fiat closed its purchase of the Chrysler shares it didn't already own.

Fiat, which became Chrysler's controlling shareholder in 2009, acquired the remaining 41.5 percent of Chrysler shares owned by the UAW Retiree Medical Benefits Trust on Jan. 21 for $4.35 billion.

The new name, logo and symbol, are designed to pay homage to the historical roots of both companies.

"Today is one of the most important days in my career at Fiat and Chrysler. Five years ago we began to cultivate a vision that went beyond industrial cooperation to include full cultural integration at all levels," CEO Sergio Marchionne said in a statement. "An international governance structure and listings will complete this vision and improve access to global markets bringing obvious financial benefits."

Under the proposal, Fiat shareholders will receive one share of Fiat Chrysler Automobiles in return for each Fiat share they hold.

All of Fiat Chrysler Automobiles' shares will be listed on the New York Stock Exchange (NYSE) with an additional listing on the Milan Stock Exchange.

The board also is proposing that the company be incorporated in the United Kingdom for tax purposes. The board said the incorporation location is not expected to affect the taxes the automaker owes in other countries where it does business. The transaction is subject to approval by Fiat's board of directors and shareholders.

Britain was selected because in Britain, taxes on dividend payments are "lower than anywhere else, so it's done as a benefit to shareholders," said company spokesman Richard Gadeselli.

Fiat's board also wants to establish Fiat Chrysler Automobiles N.V., incorporated in the Netherlands, as the parent company of the two automakers.

Fiat's board expects to complete the transactions by the end of this year.

Shareholders must approve the decision to list the company on the New York Stock Exchange, the selection of Britain for tax purposes and the selection of the Netherlands for the parent company at a shareholder meeting. The meeting has not yet been scheduled.

Marchionne did not explain the rationale or employment implications for any of the strategic decisions for the name, the incorporation location or the headquarters during a nearly two-hour conference call with analysts today.

Gadeselli said all of the strategic decisions are similar to the approach that Marchoinne took when he restructured Fiat Industrial and CNH Industrial, which fully merged last year and were renamed CNH Industrial.

CNH has about 15 employees in England an only a handful of employees in the Netherlands even though it is a global manufacturer of construction and agricultural equipment, Gadeselli said. CNH's presence in England consists of a financial staff and a global communications staff.

Gadeselli said it is likely that Fiat Chrysler Automobiles will be structured in a similar fashion. That means there will be little or no impact on employment either for Chrysler in Auburn Hills or Fiat in Turin, Italy.

Fiat Chairman John Elkann, in a statement, said the new structure is designed to secure Fiat's and Chrysler's position as the world's seventh largest automaker.

"A new chapter of our story begins with the creation of Fiat Chrysler Automobiles, a journey that started over a decade ago," Elkann said. "Fiat sought to ensure its place in an increasingly complex marketplace, has brought together two organizations each with a great history in the automotive industry and different but complementary geographic strengths."

Marchionne has said the location of the new company's headquarters would have little impact on employment or investment decisions. That's because the two companies are already managed by a 22-member group executive council whose executives are evenly divided among North America, Europe and Latin America.

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