Fiat CEO Plans to Steer Clear of Merger After Parts-Unit Sale

(Bloomberg) -- Fiat Chrysler Automobiles NV plans to stay single after the more than $7 billion sale of its auto-parts unit, Magneti Marelli.

“We’re in a much stronger position than FCA has been in the past,” Chief Executive Officer Mike Manley said on an earnings call Tuesday. “We’re confident in our five-year business plan and confident we can complete it as an independent” company.

Fiat CEO Plans to Steer Clear of Merger After Parts-Unit Sale

Manley, who took over as CEO in July just days before his predecessor Sergio Marchionne died, announced that Fiat Chrysler will pay a 2 billion euro ($2.3 billion) extraordinary dividend to shareholders after the Magneti Marelli sale, and plans to begin a regular payout starting next year.

Marchionne had been a vocal proponent of consolidation in the auto industry, but General Motors Co. rebuffed his overtures to do a deal in 2015. The late CEO ended up focusing on cutting debt and boosting margins to make Fiat Chrysler a stronger player.

The company’s shares fell as much as 2.9 percent in New York trading after it posted losses in Europe and Asia. It also booked a charge of 700 million euros related to the costs of regulatory and legal matters involving its diesel engines in the U.S.

©2018 Bloomberg L.P.