Chrysler and Fiat are in talks about creating a joint venture that would give the Italian carmaker a significant stake in Chrysler. Insiders said the companies had signed an MoU on a deal to give Fiat a 35% stake in Chrysler and an option to buy a majority, which could be announced within days. But others said that terms were still being negotiated. Under the proposal, which would be similar to the venture between Japan’s Nissan and France’s Renault, Fiat would help finance the retooling of some Chrysler factories so they could manufacture Fiat cars and components. But Fiat would not inject any cash into Chrysler. In Lex’s view, the deal is hardly surprising, and makes good sense. “Fiat, so strong in Europe and the developing world, seems a perfect fit for US-focused Chrysler.”

This entry was posted by Gwen Robinson on Tuesday, January 20th, 2009 at 5:50 and is filed under Capital markets, M&A. Tagged with chrysler, Fiat. Edit this entry.