MILAN (Reuters) - Proxy adviser Glass Lewis has recommended that Fiat investors vote in favor of a cross-border merger of the Italian carmaker and its U.S. unit Chrysler, saying its benefits outweighed concerns over potential increase in voting power of its main shareholder.
Fiat completed the buyout of Chrysler earlier this year and is hoping to incorporate the two car companies into Dutch-registered Fiat Chrysler Automobiles (FCA) to boost the world’s seventh-largest carmaker’s appeal with international investors and pave the way for a U.S. listing planned for October.
Shareholders are asked to vote on the matter on Aug. 1
Another major proxy advisor ISS and smaller peer Frontis Governance have recommended a vote against the cross-border merger, saying it decreased shareholder rights and tightened the grip on the company of holding group Exor.
“The proposed reincorporation is, on balance, in the best interests of shareholders as the benefits of access to deeper and more robust capital markets and improved governance standards outweigh our concerns regarding the potential increase in Exor’s voting power,” Glass Lewis said in its recommendation document seen by Reuters.
Exor controls Fiat Chrysler via a 30 percent stake, but its 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.
Reporting by Agnieszka Flak, editing by Valentina Za