• The U.S. government brokered a deal between Italian automaker Fiat and the recently bankrupt Chrysler; Fiat’s CEO Sergio Marchionne will become the CEO of the newly formed Chrysler Group LLC .
• It may take up to two years for Chrysler to unveil smaller cars, which are a key ingredient to Fiat’s success in Europe.
• Although Chrysler has sold its assets to the newly formed Chrysler Group LLC, it will most likely stay in bankruptcy for quite some time.

Facts & Figures

• Fiat will initially inherit a 20% stake in Chrysler, but has the potential to increase its stake to 35% should it meet certain fuel-efficiency goals.
• The new Chrysler will be owned by many different groups: 55% will be owned by the United Auto Workers union, 8% by the U.S. government, and 2% by the Canadian government.
• If Fiat is able to repay the $22.1 billion Chrysler was lent from the U.S. Treasury Department, it will be allowed to take a majority stake in Chrysler.

Best Quote

“This is by no means the end of Chrysler’s bankruptcy case. So many issues still need to be resolved, which may take months or even years.” – Ed Neiger, Founder of Neiger LLP (a creditors’ rights and bankruptcy law firm)

Tags: bankruptcy, chrysler, fiat, merger