• May 5, 2009
Think Fiat's getting a pretty sweet deal with Chrysler? The Italian automaker is, after all, gaining a 20% stake in the troubled American automaker, plus local manufacturing capacity and access to its dealer networks, all without paying a thin dime. Not a bad deal, but Chrysler's hard at work trying to make it sweeter. Emerging reports suggest that if the deal between Fiat and Chrysler were to fall apart, Chrysler would be obligated to pay Fiat $35 million in severance fees.

Chrysler is currently pursuing the clause in the courts administering its bankruptcy protection. The reasoning is that Fiat has put in the time and money into pursuing the partnership that would allow Chrysler to continue operating, and if the courts – or anyone else, for that matter – were to terminate the arrangement, Fiat would deserve compensation. A similar clause worked out well for Fiat after its partnership with General Motors was terminated. The tables now turned, Fiat has certainly come a long way since then.

[Source: The Detroit News | Image: Chris McGrath/Getty]


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  • 20 Comments
      • 5 Years Ago
      Fees when acquisitions fall apart or fail to be approved are standard. Given the size of the deal, $35 million is on the low side.
      • 5 Years Ago
      Chrysler is done, no need to fork it to see it is done.

      Time to pull the plug on Chrysler and kick Italians outa here.
        • 5 Years Ago
        Exaclty, wtf is up in America. Given that there might be "Buy American" clause in the cash for clunkers program, how is it not hypocritical for an Italian auto manufacturer to be the "saviour" of an American brand?
        • 5 Years Ago
        You're an idiot.
      • 5 Years Ago
      Seems GM was burned by Fiat is a similar deal just a couple of years ago. GM paid billions to get out of a deal with Fiat.


      Thanks Obama for funneling our tax dollars to Italy.
        • 5 Years Ago
        What does Obama have to do with the 35 million payout?
      • 5 Years Ago
      I'm just hoping to get my hands on a 2011 Fiat Viper ACR.
      • 5 Years Ago
      Personally, i'm not too terribly concerned with what happens to Chrysler, their product never appealed to me. I want this deal to go through to speed the arrival of Alfa Romeo.
      • 5 Years Ago
      I love the Charger I hope they keep it in the line up, but also can't wait to see Alfa Romeros hit the US shores, they got some nice cars.
      • 5 Years Ago
      This is called a "break-up clause." It's in virtually every corporate merger or acquisition agreement ever concluded. $35 million is modest. It would be professionally negligent for Fiat's attorneys to not insist on a breakup clause.

      Frankly, because of the Federal Government's intervention in all of this, Chrysler couldn't break up negotiations even if they wanted to.
        • 5 Years Ago
        They should change it from "breakup" to "the bankers and lawyers get paid no matter what" clause. Hundreds of businesses in all area of endeavor (my own for example - advertising) invest time and money in projects with no guarantee of success. Except apparently M+A, where the bankers and lawyers write in their guarantee. The day we could cut these leaches out of the deal would be a great one indeed.
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