Fiat and Chrysler Announce Global Strategic Alliance
This morning, Fiat S.p.A., Chrysler LLC and Cerberus Capital Management L.P. signed a non-binding term sheet to establish a global strategic alliance.
The alliance, to be a key element of Chrysler's viability plan, would provide Chrysler with access to competitive, fuel-efficient vehicle platforms, powertrain, and components to be produced at Chrysler manufacturing sites. Fiat would also provide distribution capabilities in key growth markets, as well as substantial cost savings opportunities. In addition, Fiat would provide management services supporting Chrysler's submission of a viability plan to the U.S. Treasury as required. Fiat has been very successful in executing its own restructuring over the past several years. The alliance would also allow Fiat Group and Chrysler to take advantage of each other's distribution networks and to optimize fully their respective manufacturing footprint and global supplier base.
Although no cash investment in Chrysler or commit to funding Chrysler is being provided, Fiat is receiving an initial 35% equity interest in Chrysler.
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