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Markets Focus On DaimlerChrysler To Acquire Fiat
The respected Italian newspaper "Il Giornale" of Milan reported that an agreement in principal for a share swap between DaimlerChrysler and Fiat will be announced shortly. Details are uncertain, but it appears that DaimlerChrysler will take over operations of Fiat's automotive division.
This would give DaimlerChrysler control of the Fiat, Lancia, Alfa Romeo, and Ferrari brands. The automotive division is widely considered to be the least profitable of Fiat's businesses. Current information suggests that the deal does not include the auto parts, commercial truck, aviation, agricultural, or railstock divisions. Apparently the only serious internal opposition comes from Fiat's Honorary Chairman, Gianni Agnelli.
The story is given greater credence by the fact that DaimlerChrysler co-Chairman Bob Eaton has just announced his retirement and this would leave Jürgen Schrempp (the co-Chairman from Daimler) to pursue his long-held ambition of making a further deal with another major car manufacturer.
Fiat's shares surged on the news but still remained well below their historical peak. The low stock price contributes to Fiat's attractiveness to potential bidders. The company will announce financial results on 18th February and fourth quarter results are expected to be far better than in the previous year.
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