Shareholders on Friday formally
approved the merger that has created Fiat Chrysler Automobiles
(FCA), allowing the world's seventh-largest automaker to
continue to expand internationally.
"It's just the beginning," President John Elkann said after
the vote to merge Turin-based Fiat with American automaker
Chrysler.
Dissenting shareholders can opt out of the deal, but Chief
Executive Officer Sergio Marchionne said he was confident that
FCA will be profitable and investors will be rewarded.
"I have not the slightest doubt that the plan is feasible,"
Marchionne told the shareholders' assembly, the last to be held
in the city of Turin, where Fiat was founded by Giovanni Agnelli
115 years ago.
FCA has estimated it will save 1.5 billion euros between
now and 2018 from greater collaborations between the group's
brands.
Shares in the automaker fell by 1.86% on Friday to 7.11
euros on news of the shareholder approval.
Shareholders holding about 8% of equity voted against the
merger.
Those dissenters can sell their shares over the next 15
days at a rate set at 7.727 euros per share and Marchionne has
said that if more than 500 million euros in shares are sold, the
merger may be stalled.
The new entity can now make a "leap" to greater quality,
said Marchionne, who had worked for at least five years on the
merger.
The Italian-Canadian executive insisted FCA will not turn
its back on Italy but instead, it will maintain its social and
historic commitments to Italy as "a company that can and should
aim high," Marchionne told shareholders.
"We are rooted in the territories in which we operate,"
said Marchionne, who has said that he expects to see a combined
output of up to six million autos per year by 2018.
Last year, Fiat and Chrysler delivered a combined total of
4.4 million autos.
Marchionne has said that Fiat's administrative offices and
jobs will stay in Italy.
"In all the choices we have made and what we do, we try
always to find the right balance between the logic of profit and
social responsibility," he said.
There have been concerns about the actual base of the new
entity, which will have its registered office in the Netherlands
and tax base in the United Kingdom.
The formal approval of the merger will allow Marchionne to
have FCA listed on the New York Stock Exchange in the fall, to
become more widely traded and better able to raise money.
Marchionne said that Fiat will also "respect the
commitments to employees" including pledges to reopen all Fiat's
Italian factories and rehire workers on furlough.
A five-year plan unveiled in May by Marchionne forecast
major capital injections, including five billion euros over five
years for development of new Alfa Romeo models, and another two
billion euros for development of the luxury Maserati line, where
sales are expected to jump to 75,000.
Marchionne hatched the audacious idea to take over the
Detroit automaker after Fiat rescued bankrupt Chrysler amid the
US economic crisis in 2009.
Five years later, Fiat finally gained full control of
Chrysler in a $4.35-billion US deal with a United Auto Workers
union healthcare trust that was approved in January.
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