So Long Chrysler, Hello Fiat (Obama-Induced Merger)



Shortly after yesterday’s big announcements, Chrysler and Fiat announced that they had come to a tentative deal regarding their merger. US President Obama’s administration has stated that the merger is a necessary condition for further bailout money to be granted to them.

Does this make it a done deal? Not so fast. Follow the jump for more.

Experts are predicting that the new 30-day deadline that the Obama administration has given to Chrysler might actually be intended for them to prepare to file bankruptcy. From there,  Fiat could cherry-pick the resources it needs. From a business standpoint, this makes sense – Fiat will, of course, be gaining facilities and unparalleled access to a dealer network across North America through which it can market and sell its line. But why would Fiat want to take on a Chrysler’s debt load? They don’t. Fiat is actually going to great lengths to make it clear that there will be no cash or debt exchanged between the two companies in a merger.

Whether this particular scenario is actually the feasible or not remains to be seen. One thing is for certain, though – Fiat is definitely coming our way, one way or another.