Fiat CEO Sergio Marchionne
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TURIN, Italy -- Fiat SpA took a step closer to a full merger with Chrysler Group LLC Wednesday after the Italian carmaker's shareholders approved a simplified capital structure with the creation of a single class of common stock.
Fiat is interested in getting "100 percent" of Chrysler, Sergio Marchionne, who runs both automakers, told reporters in Turin Wednesday after Fiat's annual shareholders meeting. "The mechanism is subject to negotiations and market conditions," while it's "highly unlikely" the merger will occur this year, he said.
Fiat owns 58.5 percent of Auburn Hills, Mich.-based Chrysler and Mr. Marchionne, 59, plans to combine the two manufacturers to boost sales to more than $132 billion by 2014 and allow its European business to reach break-even by that same year. Mr. Marchionne reiterated Wednesday that Fiat may buy 3.3 percent more of Chrysler in the second half if it exercises options held on the stock.
The two carmakers, which entered an alliance nearly three years ago, expect to sell between 4.1 million and 4.4 million vehicles this year, up from just over 4 million in 2011.
The Italian manager, who grew up in Canada, is counting on Chrysler to propel growth at Turin-based Fiat, whose volume brands lost about $660 billion in Europe last year as the region's debt crisis caused consumers to hold back on purchases. The Italian carmaker relied on Chrysler for all of its net income in 2011 as U.S. sales surged.
"With the crisis in Europe and the recovery of the U.S car market, Mr. Marchionne should hurry up and complete the merger as soon as possible and look at the capital market in the U.S. to fund new investments," Wolfram Mrowetz, chairman of investment firm Alisei SIM in Milan, said Wednesday.
Fiat investors voted in favor of converting savings and preferred shares into common stock.
The shift will be a "means of preparing for a potential merger with Chrysler," Mr. Marchionne said on Oct. 28. Investment firm Exor SpA, which controls the Italian carmaker, supported the plan.
The Associated Press contributed to this report.