Announcement of Fiat/Chrysler Merger Boosts Fiat Stock by 16%

One day after the announcement that FiatFiatItaly, 1899 > present159 models
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had bought the rest of the shares of ChryslerChryslerUnited States of America, 1925 > present70 models
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, the Italian automaker is already reaping the rewards. Fiat’s stock on the Italian exchange grew 16.4% on the day of the announcement, the highest since August 2011.

Marchionne negotiated the deal for $4.35 billion, $650 million less than expected. When the merger is finalized by the end of the month, Fiat will become the world’s seventh largest automaker.

Fiat has set a goal of breaking even financially by 2016, and its challenge now will be capitalizing on the merger. Chrysler offers Fiat new factories in Mexico, the United States and Canada, and a relatively stable sales base that can be used to develop new vehicles for Europe.

Some Chrysler Group models will likely be built in Italy at underused factories and exported around the world.

Source: Automotive News Europe