Stake deal before Fiat, Chrysler combine
Source: Bloomberg News |
June 4, 2013, Tuesday
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Print Edition
Print Edition
EXOR SpA, the Agnelli family holding company which controls Fiat SpA, sold a stake in SGS SA for 2 billion euros (US$2.6 billion), freeing up resources ahead of the Italian automaker's planned combination with Chrysler Group LLC.
Exor, which will post a capital gain of 1.53 billion euros from the sale of its 15 percent holding in the Swiss product-inspection provider to Groupe Bruxelles Lambert SA, will use the money to pursue "new investment opportunities," the company said in a statement yesterday.
Chairman John Elkann said last week that Exor has enough funds to invest in Fiat and Chrysler when they combine. One option being explored is to create a company in the US, merge Fiat and Chrysler into it and issue shares in the new entity, a person familiar with the matter said last week.
"We clearly see a connection between the sale of the SGS stake and the hypothesized capital increase of Fiat-Chrysler," Gabriele Gambarova, an analyst at Banca Akros in Milan wrote in a note to clients yesterday.
The sale "suggests the Fiat-Chrysler capital increase might be bigger than the 3 billion euros to 4 billion euros previously estimated."
Elkann disclosed last week that Exor has "firepower" of about 1.6 billion euros to be used for new investments, including cash and additional borrowing capacity.
Exor, which will post a capital gain of 1.53 billion euros from the sale of its 15 percent holding in the Swiss product-inspection provider to Groupe Bruxelles Lambert SA, will use the money to pursue "new investment opportunities," the company said in a statement yesterday.
Chairman John Elkann said last week that Exor has enough funds to invest in Fiat and Chrysler when they combine. One option being explored is to create a company in the US, merge Fiat and Chrysler into it and issue shares in the new entity, a person familiar with the matter said last week.
"We clearly see a connection between the sale of the SGS stake and the hypothesized capital increase of Fiat-Chrysler," Gabriele Gambarova, an analyst at Banca Akros in Milan wrote in a note to clients yesterday.
The sale "suggests the Fiat-Chrysler capital increase might be bigger than the 3 billion euros to 4 billion euros previously estimated."
Elkann disclosed last week that Exor has "firepower" of about 1.6 billion euros to be used for new investments, including cash and additional borrowing capacity.
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