AUBURN HILLS, Mich. — Chrysler LLC today announced that the U.S. Bankruptcy Court, Southern District of New York, has approved its request to sell substantially all of its operations to Chrysler Group LLC, the new company formed in alliance with Fiat SpA.
The deal, valued at approximately $2 billion, gives a 55 percent share of the new company to a UAW trust for retirees, a 20 percent stake to Fiat and smaller shares to the U.S. and Canadian governments. Fiat’s share could grow to 35 percent under the plan.
"With this approval, the new Chrysler Group is created and can prepare to launch as a vibrant new company formed with Fiat," said Robert Nardelli, chairman and chief executive officer of Chrysler LLC. "Through the hard work and foresight of many Chrysler stakeholders, Chrysler Group will soon begin operations with significant strategic advantages, such as a wage and benefit structure for active and retired employees that is competitive with those of transplant manufacturers; a reduction of debt and interest expense; the disposition of idle assets; a rationalized and more efficient dealer network; and sound agreements with our suppliers. While this has been an extremely difficult chapter in Chrysler’s history for all involved, the new Company and its customers, employees and suppliers can now begin on a fresh page."
Chrysler’s Mexican, Canadian and other international operations will also be acquired by Chrysler Group.
As the company announced previously on April 30, Nardelli, who had been leading Chrysler since August 2007, will resign from Chrysler LLC on completion of the transaction. He will return to Cerberus Capital Management LP as an adviser.
The alliance with Fiat provides Chrysler Group with access to products that complement the company’s current portfolio, technology cooperation and stronger global distribution. According to Chrysler, work with Fiat is already well underway to develop the next generation of environmentally friendly, fuel-efficient high-quality vehicles.
With the court’s approval of the deal, Chrysler is expected to emerge from bankruptcy protection in the next 60 days.
