Fiat’s board of directors has adopted a new name, new logo and new charter as it completes the take over of the Chrysler Group.
The board elected to establish Fiat Chrysler Automobiles N.V., which will be chartered in the Netherlands, as the parent company of the Group. FCA’s common shares will be listed on stock exchanges in New York and Milan.
In practical terms, Fiat Chrysler Chief Executive Officer Sergio Marchionne said the Chrysler and Fiat automobile groups will see relatively little change in their day to day operations.
However, everyone will see a pronounced change with the company’s new logo. Shaded in a blue reminiscent of Chrysler’s old badging, the logo features the initials of the new company, FCA, with the name Fiat Chrysler Automobiles underneath.
“Use of an acronym helps create a transition from the past, without severing the roots, while at the same time reflecting the global scope of the Group’s activities,” the company said in a statement. “Easy to understand, pronounce and remember, it is a name well suited to a modern, international marketplace.”
The changes announced following the directors meeting are momentous as the underscore Fiat complete takeover of the Chrysler Group in the wake of a $4.35 billion purchase of the 41.5% of the Chrysler shares that had belonged to the United Auto Workers VEBA trust.
“A new chapter of our story begins with the creation of Fiat Chrysler Automobiles,” said John Elkann, Chairman of Fiat. “A journey that started over a decade ago, as 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. FCA allows us to face the future with a renewed sense of purpose and vigor.”
For his part, Marchionne was thrilled that the deal was finally done.
“Today is one of the most important days in my career at Fiat and Chrysler,” he said. “Five years ago we began to cultivate a vision that went beyond industrial cooperation to include full cultural integration at all levels. We have worked tenaciously and single-mindedly to transform differences into strengths and break down barriers of nationalistic or cultural resistance.
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“Today we can say that we have succeeded in creating solid foundations for a global automaker with a mix of experience and know-how on a level with the best of our competitors. An international governance structure and listings will complete this vision and improve the Group’s access to global markets bringing obvious financial benefits.”
Under the proposal approved by the Fiat board, Fiat shareholders will receive one FCA common share for each Fiat share they hold and the FCA common shares will be listed on the New York Stock Exchange (NYSE) with an additional listing on the Mercato Telematico Azionario (MTA) in Milan.
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As expected, FCA is expected to be resident for tax purposes in the United Kingdom, but this is not expected to affect the taxes payable by Group companies in the jurisdictions in which their activities are carried out.
In order to foster the development and continued involvement of a core base of long-term shareholders, FCA will adopt a loyalty voting structure, under which Fiat shareholders who are present or represented by proxy at the Fiat shareholder meeting called to vote on the proposal and who continue to hold their shares until the closing, regardless of how they vote, are eligible to receive special voting shares equivalent in number to the newly-issued FCA common shares they receive. The special voting shares will be subject to specific terms and conditions.
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After the closing, shareholders who hold their FCA common shares for at least three years would also be entitled to participate in the loyalty voting structure. FCA shareholders will be eligible for loyalty voting until they transfer their common shares. This structure is intended to facilitate a stable shareholder base and reward long-term share ownership, while allowing the Group enhanced flexibility to pursue strategic opportunities.