Just days after agreeing to take a 20 percent stake in Chrysler, Fiat is expected to announce plans to purchase GM Europe’s core brands of Opel, Vauxhall, and Saab.
Just days after agreeing to take a 20 percent stake in Chrysler, Fiat is expected to announce plans to purchase GM Europe's core brands of Opel, Vauxhall, and Saab. While we have heard rumors of Fiat's desire for Opel in the past, this is the first time that the company has officially confirmed their interest in acquiring GM's European brands.
If such a move were to take place, Fiat would likely spin its self off to create a new company which would include Fiat, Lancia, Alfa Romeo, Chrysler, Saab, Opel and Vauxhall. The proposed company would become the world's second largest automaker by selling 6-7 million vehicles a year and posting annual revenues of nearly 80 billion euros ($106 billion).
In an interview with the Financial Times, Fiat's Sergio Marchionne said "From an engineering and industrial point of view, this is a marriage made in heaven." He went on to say that Fiat and Opel could save nearly a billion euros a year by sharing platforms and technology. If everything goes according to plan, Marchionne believes that the transaction could be completed by the end of month.
Fiat will likely face fierce opposition from labor unions in Germany and Italy as both countries are expected to lose jobs as a result of the merger. While it's unlikely that the unions could prevent Fiat from buying GM Europe, the delay could allow rival bidder Magna International time to submit a higher counter offer for Opel.