Chrysler 2014 Annual Report Download - page 39

2014 | ANNUAL REPORT 37
Over the following years, Fiat acquired additional ownership interests in FCA US, leading to majority ownership and
full consolidation of FCA US’s results into our financial statements from June 1, 2011. On May 24, 2011, FCA US
refinanced the U.S. and Canadian government loans, and, in July 2011, Fiat acquired the ownership interests in FCA
US held by the U.S. Treasury and Canadian government.
In January 2014, Fiat purchased all of the VEBA Trust’s equity interests in FCA US, which represented the
approximately 41.5 percent of FCA US interest not then held by us. The transaction was completed on January 21,
2014, resulting in FCA US becoming an indirect 100 percent owned subsidiary of FCA.
On October 29, 2014, FCA’s Board of Directors announced that it had authorized the separation of Ferrari from FCA.
The separation is expected to be effected through a public offering of a portion of FCA’s interest in Ferrari and a spin-
off of FCA’s remaining equity interest in Ferrari shares to FCA’s shareholders.
The FCA Merger
On January 29, 2014, the Board of Directors of Fiat approved a proposed corporate reorganization resulting in the
formation of FCA and decided to establish FCA, organized in the Netherlands, as the parent company of the Group
with its principal executive offices in the United Kingdom.
On June 15, 2014, the Board of Directors of Fiat. approved the terms of a cross-border legal merger of Fiat, the
parent of the Group, into its 100 percent owned direct subsidiary, FCA, or the Merger. Fiat shareholders received
in the Merger one (1) FCA common share for each Fiat ordinary share that they held. Moreover, under the Articles
of Association of FCA, FCA shareholders received, if they so elected and were otherwise eligible to participate in
the loyalty voting structure, one (1) FCA special voting share for each FCA common share received in the Merger.
The loyalty voting structure is designed to provide eligible long-term FCA shareholders with two votes for each FCA
common share held.
FCA was incorporated under the name Fiat Investments N.V. with issued share capital of €200,000, fully paid and
divided into 20,000,000 common shares having a nominal value of €0.01 each. Capital increased to €350,000 on
May 13, 2014.
Fiat shareholders voted and approved the Merger at their extraordinary general meeting held on August 1, 2014. After
this approval, Fiat shareholders not voting in favor of the Merger were entitled to exercise cash exit rights (the “Cash
Exit Rights”) by August 20, 2014. The redemption price payable to these shareholders was €7.727 per share (the “Exit
Price”), equivalent to the average daily closing price published by Borsa Italiana for the six months prior to the date of
the notice calling the meeting).
On October 7, 2014, Fiat announced that all conditions precedent to completion of the Merger were satisfied.
The Cash Exit Rights were exercised for a total of 60,002,027 Fiat shares equivalent to an aggregate amount of €464
million at the Exit Price. Pursuant to the Italian Civil Code, these shares were offered to Fiat shareholders not having
exercised the Cash Exit Rights. On October 7, 2014, at the completion of the offer period Fiat shareholders elected
to purchase 6,085,630 shares out of the total of 60,002,027 for a total of €47 million; as a result, concurrent with
the Merger, on October 12, 2014, a total of 53,916,397 Fiat shares were canceled in the Merger with a resulting net
aggregate cash disbursement of €417 million.
As a consequence, the Merger became effective on October 12, 2014. On October 13, 2014 FCA common shares
commenced trading on the NYSE and on the MTA. The Merger is recognized in FCA’s annual accounts from January
1, 2014. FCA, as successor of Fiat is now therefore the parent company of the Group. There were no accounting
effects as a direct result of the Merger.