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Fiat-Chrysler shares rise as company sees boost from merger
March 31, 2014 / 11:51 AM / 4 years ago

Fiat-Chrysler shares rise as company sees boost from merger

TURIN, Italy, March 31 (Reuters) - Fiat Chrysler Automobiles (FCA) has told shareholders to expect plenty of good news as the completion of a full merger with U.S. unit Chrysler opens greater global opportunities for the world’s seventh-largest carmaker.

Shares in Fiat SpA - the original Italian company which is merging with its U.S. partner - rose some 2 percent to their highest in more than six years.

The creation of FCA after Fiat took full control of the third-largest U.S. auto group in January in a $4.35 billion deal paves the way for Fiat to easily and cheaply share technology, cash and dealer networks with Chrysler.

“The birth of FCA will end the precarious life of Fiat,” Chairman John Elkann told a shareholders’ meeting on Monday. “Today for the first time we have different prospects: we no longer need to play a game of survival ... you can expect much good news in the future.”

Chief Executive Sergio Marchionne reiterated the group’s forecast of a 2014 trading profit of between 3.6 billion euros ($5 billion) and 4.0 billion on revenue of around 93 billion. Worldwide group shipments are expected to rise to between 4.5 and 4.6 million vehicles, up from 4.4 million the previous year, he added.

Marchionne said the growth in shipments will be largely driven by higher volumes in North America and Asia-Pacific.

FCA expects a new strategy focusing on exports of premium brands such as Maserati and Alfa Romeo to help override some of the weak demand in its traditional markets, especially Italy, hit by a six-year slump in car sales in Europe.

A new industrial plan outlining new models and investments will be presented in early May.

The new FCA - formal creation of which is still subject to a shareholder vote - will have its primary listing in New York, with a secondary listing in Milan. The holding group will be registered in the Netherlands and have its tax domicile in Britain, cementing a politically sensitive shift away from Italy, Fiat’s home for the last 115 years.

Marchionne has said he expected to finalise the merger and the move of the merged group’s primary listing before the end of the year. Unions and politicians have been concerned about any potential job cuts but Fiat said the merger would have no impact on jobs in Italy or elsewhere.

Fiat shares were up 2.1 percent at 8.415 euros by 1124 GMT, after rising as high as 8.42 euros, their highest since November 2007. By comparison the FTSE All-Share Italian index was up 0.7 percent.

$1 = 0.7271 Euros Editing by David Holmes

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