Fiat Present Chrysler Alliance Provisions
As we all know, Fiat has the contractual right to acquire an additional 15 percent of Chrysler, no questions or money asked, but only if some previous targets, three of them, are being achieved. The contract between the two carmakers calls these targets Performance Events.
The first such event is the approval, both for production and implementation into Chrysler vehicles for the US, of an engine based on the Fiat Fire family. The second is the achievement of a revenue of $1.5 billion in the markets outside NAFTA and the beginning of sales on the South America market of yet unnamed Chrysler models.
The third Performance Event is the approval for the production of a Chrysler model based on a Fiat platform, one which will achieve a combined fuel consumption rating of 40 mpg.
If one of these targets is not achieved by the first day of 2013, Fiat may still get the 5 percent associated with the respective target by exercising a primary call option.
When the dust settles over the alliance, Fiat will find itself with the right of holding at most 49 percent of the American carmaker, prior to the full repayment of the loans received from the US and Canadian governments.
More details about the deal between the two manufacturers can be found by following this link.