MILAN -- Fiat shareholders will likely approve the automaker's merger with Chrysler Group when they meet in Italy for the last time on Friday.
Industry watchers expect Fiat to win the two-thirds majority vote needed for a merger that will create the world's seventh largest automaker because its biggest shareholder, Exor, the holding company of Fiat's founding family, owns an influential 30.04 percent stake.
A positive vote at the special shareholders meeting called by Fiat "is pretty much a done deal," said a Milan-based industry analyst.
Proxy advisors, whose recommendations are usually followed by international investors, have issued different advice to shareholders. ISS and Frontis Governance recommend a 'no' vote because Exor's voting power in the merged company could rise to as much as 46 percent, reducing minority shareholder rights. However, Glass Lewis said Fiat investors should vote in favor because the merger's benefits outweigh the concerns.
Failure to secure approval of the merger could complicate Fiat Chrysler's plans to list its stock in the United States and secure funds for its five-year business plan.
Fiat completed its buyout of Chrysler earlier this year and CEO Sergio Marchionne said on July 23 he was confident that the merger would be approved. The merged automaker will be registered in the Netherlands and called Fiat Chrysler Automobiles NV, or FCA. It aims to list its shares in New York by October to gain better access to financial markets while maintaining a secondary listing in Milan. FCA would have its tax domicile in London to benefit from lower tax on dividend payments to its shareholders.
Friday's shareholder meeting will be historic because it will be the last one that they will hold in Turin, Fiat’s home since it was founded more than a century ago. Future meetings will held in Amsterdam.
Fiat’s workers hope Marchionne will tell shareholders which new models will be built at the automaker's underused Mirafiori plant in Turin, its oldest and largest factory.
Fiat has said it will invest 1 billion euros in the plant to build Maserati's first SUV, the Levante, and other unnamed products. The plant is the only one of Fiat’s six in Italy whose role in Marchionne’s latest business plan has yet been fully disclosed.
Automotive News Europe sources say Mirafiori has been picked to build an Alfa Romeo variant of the Levante and the successor to the Maserati GranTurismo coupe.
"We expect that Marchionne will make his position clear on the matter,” said Ferdinando Uliano of the FIM Cisl union.