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.
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.
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