Chrysler completes sales of assets to Fiat

• Source: xinhua
• [13:29 June 11 2009]
• Comments

Chrysler LLC, the third largest US automaker that filed for bankruptcy protection at the end of April, has completed its sales of assets to a new group headed by Italian auto giant Fiat, allowing for the formation of a new automaker -- Chrysler Group LLC.

The new group will combine the good assets from the bankrupt Chrysler and technology from Fiat, the company announced on Wednesday.

File photo taken on May 30, 2009 shows the exterior of Chrysler LLC in Michigan, the United States. (Xinhua/Gu Xinrong)

The move came one day after the US Supreme Court decided not to hear a court action from a group of pension funds in the US state of Indiana, which had temporarily halted the merger on Monday.

The deal has come five days ahead of a deadline imposed by Fiat to complete the merger and is expected to open the door for more government loans to the struggling Chrysler.

This file photo taken on May 30, 2009 shows the Chrysler headquarters in Michigan, the United States. Chrysler has completed the sale of its assets to a group headed by Italy's Fiat, allowing for the formation of a new automaker, the US automaker announced on Wednesday. (Xinhua/Gu Xinrong)

The deal gives Fiat, which manufactures Fiat-, Alfa Romeo-, and Lancia-branded vehicles in Europe, 20 percent of the equity in Chrysler in exchange for sharing billions of dollars worth of technology and engineering assets with the U.S. automaker. The company has an option to buy up to 35 percent of Chrysler down the road if certain milestones mandated by the agreement are achieved.

The two sides signed off on a partnership this morning that creates a new automaker to be known as Chrysler Group LLC.

It begins operations immediately, under new chairman Robert Kidder and Chief Executive Officer Sergio Marchionne, who is also CEO of Fiat. Former Chrysler chairman and CEO Robert Nardelli returns to former employer Cerberus Capital Management LP.