Word: fiat
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Dates: during 1960-1969
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Still, in the eyes of Citroën President Pierre Bercot and Fiat Chairman Giovanni Agnelli, the French government's non was not absolute. They kept right on conferring and finally produced a plan that won De Gaulle's approval. It called for joining the companies in a "common organism" that would command $2.8 billion in annual sales and be managed by Fiat and Citroën on theoretically equal terms...
Lots of Leverage. Under the new arrangement, Fiat will fall short of achieving the 30-40% of Citroën stock that it had originally aimed for. Instead, it will get only 15%, with no strings attached. Yet Fiat will actually have much more leverage than that, since it will have a large share of a holding company that will control its new partner, Citroën. Most of the holding company's stock will come from France's tire-making Michelin family, which now owns over half of Citroën and which opened the original merger...
...present plan also gives Citroën an option to buy 15% of Fiat. Inasmuch as Citrëen is already carrying debts of more than $100 million (including some $56 million to the De Gaulle government), and needs more capital to develop new models, there is virtually no chance that the French company will ever be able to take advantage of the option. The proviso is, therefore, little more than a face-saving device for De Gaulle...
...urged a merger between Citroën and other French automakers -Peugeot and/or government-owned Renault. But that plan did not even begin to work out, and last month Citroën's Bercot laid his feelings on the line. "There is no substitute," he said. "It is Fiat or nothing...
...same time, Fiat's Agnelli has never made a secret of his ambition to turn his highly successful company (1967 sales: $1.9 billion) into the first Europewide, European-owned automaker. He is convinced that such a firm will be necessary in the 1970s if the European auto industry is to weather American competition. He therefore let it be known that if he could not strike a bar gain with Citroën he would look elsewhere-perhaps toward West Germany's Volkswagen. Such a combine might so overwhelm France's entire auto industry that it would crumble...