* Agnelli family's voting power could rise to 46 pct
* Shareholders to vote on merger on Aug. 1
* Risks include U.S. liquidity challenges, market headwinds
MILAN, July 7 Fiat's founding Agnelli
family may tighten its grip on the carmaker after its merger
with U.S. unit Chrysler and a Wall Street listing later this
year, a U.S. regulatory filing showed.
The move would contrast with some other European carmakers
where controlling dynasties have been forced to cede control for
the companies to survive.
The Agnellis control Fiat Chrysler with a 30 percent stake
via holding firm Exor, but their voting power could
rise to as much as 46 percent through a loyalty scheme put in
place as part of the merger to reward long-term investors.
Under the scheme, shareholders who have held their stakes
for three years can get two votes for each share they own in a
move that would effectively make it "more difficult for Fiat
Chrysler Automobiles (FCA) shareholders to change FCA's
management or acquire a controlling interest in FCA", Fiat
Chrysler said in a filing with U.S. market regulator SEC.
Exor plans to participate in the scheme, Fiat said, but its
voting power would rise to as much as 46 percent only if no
other shareholder takes part.
Family ownership has often stood in the way of restructuring
at European carmakers who have been slow to adapt to competitive
threats, missing out on opportunities to build partnerships.
The Peugeot family only reluctantly ceded control
earlier this year through the tie-up with China's Dongfeng Motor
Co. to bring the French group much-needed cash.
While rumours of a potential Agnelli family exit have
surfaced over the years in Italy's press, Exor has repeatedly
said the stake remained a strategic investment for the family.
But while Exor's increase in control would make Fiat
Chrysler less of a takeover target and reduce its options for
strategic tie-ups, the Agnellis have helped restructure the
group they founded 115 years ago, analysts said.
They have also brought in CEO Sergio Marchionne, widely
credited for turning its and Chrysler's fortunes around.
"There are very few examples in the automotive industry of a
strong family owner who has been beneficial to the company, but
in the past the Agnellis have acted in a very constructive way,"
said Sascha Gommel, an analyst at Commerzbank. "I would sit on
the fence on this one."
Fiat Chrysler said in the filing the 62-year-old Marchionne,
who has vowed to lead the joint group until 2018, remains
"critical" to the execution of the company's ambitious growth
The company is counting on the merger and a U.S. listing to
help foot the bill for its 48 billion euro ($65.5 billion) plan
to grow net profit five-fold and sales by 60 percent by 2018.
However, the tie-up will not result in any significant
operational cost savings or synergies, it said in the filing.
Shareholders are due to vote on the merger on Aug. 1.
Investors will receive one FCA share for each Fiat share
they hold. Most will also be eligible for the special voting
shares, which will not be listed or traded.
Shareholders who vote against the merger are entitled to
cash exit rights of 7.727 euros ($10.54) per share.
The carmaker expects challenges in creating enough liquidity
for its shares in the U.S. market, which will be complicated by
its shares also being listed in Milan. U.S. trading volumes of
Fiat's sister company CNH Industrial remain
tiny eight months after listing on Wall Street.
FCA will be Dutch-registered, headquartered in London and
have its tax domicile in Britain, although the company said
authorities may treat it as also being tax resident elsewhere.
Fiat Chrysler said a potential delay to the merger or U.S.
listing - both anticipated to be concluded this year - could
affect its business plan, operations and shares.
($1 = 0.7331 Euros)
(Reporting by Agnieszka Flak, editing by David Evans)