Chrysler takeover
July 24, 2009
The European Union has approved Italian carmaker Fiat's bid to take over Chrysler, the third largest US automaker and owner of the Jeep and Dodge brands. The two companies reached a deal last month to create a global auto giant.
EU regulators say the move will not damage competition in Europe because Fiat will not be able to exercise sole control over Chrysler.
Regulators say the two companies have only limited market overlap as Chrysler does not make cars in Europe – Fiat's main market – and also sells very few vehicles here.
"After examining the operation, the European Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area or any substantial part of it," the EU said in a statement.
Fiat will initially hold 20 percent of Chrysler Group, with its stake later increasing to 35 percent and eventually to a majority stake.
The move forms part of a restructuring program at Chrysler, which has run up massive debts as a result of slumps in sales due to rising oil prices and the current economic crisis.
The deal has the support of the US government, which has agreed to provide new loans to Chrysler contingent on the deal with Fiat.
ca/AFP/AP/dpa
Editor: Susan Houlton