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Breaking News – Fiat and Chrysler Announce Merger.

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Italian car manufacturers Fiat have officially announced that they reached an agreement to fully merge with Chrysler, making the company the seventh largest automotive manufacturer in the world.

Since the announcement, which was made on New Years Day, Fiat shares have risen by 15% in Milan, representing the biggest gain in over three years.

Fiat will acquire the 41.46% stake in Chrysler that it did not already own, after over a year of tense talks with the previous shareholders, a retiree healthcare trust associated with the United Auto Workers Union.

CEO of Fiat, Sergio Marchionne, has run Chrysler since 2009, when the US company underwent government funded bankruptcy restructuring. The merger not only demonstrates Marchionne’s formidable negotiating skills, but will also create a company that, given its combined cash pools and global potential, will challenge the likes of General Motors.

The merger is the first major change to an automotive manufacturer in 2014, but we are sure to see many more this year with the recovery of the global economy. Already rumours have surfaced about a potential partnership between GM and Tesla, with more sure to follow – read about it here on our blog.

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