Five years after assuming management control of Chrysler Group when the latter emerged from bankruptcy, Italian automaker Fiat has struck a deal to buy the 41.5 percent stake in the company it did not already own.
Fiat kicked off 2014 by
that it has reached an agreement to acquire the final stake in the U.S. automaker for $4.35 billion from the United Automobile Workers (UAW) Retiree Medical Benefits Trust, a Voluntary Employee Beneficiary Association (VEBA) that pays out health care benefits to Chrysler retirees.
The deal ends months of fighting between Fiat and the UAW trust, with the two sides going to court last fall in an effort to determine the value of the trust’s holdings.
Under the terms of Fiat’s agreement with the UAW trust, the latter is to receive $3.65 billion in cash up front, with Fiat paying $1.75 billion and Chrysler contributing another $1.9 billion. Chrysler has also agreed to pay four annual installments totaling $700 million after the deal closes, an event that is expected to occur before January 20.
Marchionne—who is now CEO of both Fiat and Chrysler—has consistently turned to his regular outside counsel, New York- and Palo Alto-based Sullivan & Cromwell corporate partner Scott Miller, for all matters Chrysler-related. Miller—whose relationship with Marchionne dates back more than a decade—guided Fiat through its initial investment in Chrysler, in 2009, and represented the company again when it took its majority stake two years later. Miller then began representing Chrysler—after Marchionne took the company’s reins—in the deals that saw Fiat buy out the government stakes. Miller was also leading the S&C team advising Chrysler on its planned IPO, according to our previous reporting.
Now, Miller is leading an S&C team advising Fiat on the acquisition of the final Chrysler stake. He is joined by tax partners Andrew Solomon and Davis Wang, as well as employee benefits special counsel Rebecca Coccaro and associates Jinyoung Joo, Kevin Salinger and James Shea. Fiat’s top in-house attorney is Roberto Russo.
Skadden, Arps, Slate, Meagher & Flom is representing Chrysler’s independent directors in connection with the deal, according to a source close to the transaction. A Skadden spokeswoman did not immediately respond to The Am Law Daily’s request for comment. In 2007, Skadden represented DaimlerChrysler (along with cocounsel Shearman & Sterling) in the German company’s
$7.4 billion sale
of an 80 percent stake in Chrysler to private equity firm Cerberus Capital Management.
Meanwhile, attorneys at Stroock & Stroock & Lavan are serving as outside legal counsel to Brock Fiduciary Services, the financial adviser that has managed the UAW VEBA stake in Chrysler and negotiated the deal for the trust. Stroock’s New York-based team includes M&A of counsel Martin Neidell, benefits and compensation of counsel Mark Wintner, corporate partner Jordan Rosenbaum, tax chair Jeffrey Uffner and associate Danielle Motelow.