Auto suppliers up as Chrysler sale closes
CHICAGO (Reuters) - Shares of U.S. auto suppliers rose sharply on Wednesday as news that Italian automaker Fiat (FIA.MI) had completed the purchase of Chrysler's strongest assets erased fears that the U.S. car maker could face liquidation if the deal did not go through.
The deal was also seen as a good omen for General Motors' GMGMQ.PK progress through bankruptcy and eased concern over whether some auto suppliers could survive the current downturn.
Shares of Dana Holding (DAN.N) rose nearly 16 percent to $1.76, while American Axle & Manufacturing Holdings (AXL.N) was up 24 percent at $4.44. Lear (LEA.N) surged nearly 45 percent to $2.30, ArvinMeritor (ARM.N) was up 11 percent at $4.17, and Tenneco (TEN.N) rose more than 6 percent to $9.81.
"The completion of the alliance with Fiat starts to take the threat of liquidation off the table for Chrysler, which was a serious cause for concern," said independent auto analyst Erich Merkle.
"This at least sets a good tone for GM as it proceeds through bankruptcy," he added. "Thus far, it looks like GM's bankruptcy should be fairly smooth and that disaster has been averted for now."
Analysts and industry experts say the collapse of any of the Detroit Big Three automakers -- GM, Chrysler or Ford (F.N) -- would send shock waves throughout the U.S. auto supplier base and push many companies out of business.
(Reporting by Nick Carey; editing by Lisa Von Ahn)
