Fiat SpA is negotiating compensation from General Motors to settle their dispute over a pledge by the US car maker to buy the Fiat Auto unit, the Italian automaker’s chairman said in a French newspaper interview published on Thursday, according to Associated Press (AP).
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
AP said Umberto Agnelli was quoted in financial daily Les Echos as saying that Fiat and GM were in talks over the terms for cancelling a disputed put option that allows Fiat to sell its struggling Auto division to the Detroit-based car maker between 2005 and 2010.
Associated Press noted that GM believes the option was nullified by sales of Fiat assets over the past three years and a capital increase at the Italian firm while Fiat insists the agreement is still in force, though top company officials have said that they do not want to exercise the option.
GM issued the option three years ago as part of a tie-up in which it acquired 20% of the Italian car firm, AP added.
“Naturally, in order to give up the put option, we would need something in return,” Agnelli reportedly told les Echos.
He said any settlement was likely to involve “financial compensation,” but added that other solutions might be possible, AP said.
Associated Press said it was Agnelli’s first major interview since he took over as chairman in February after the death of his elder brother, legendary Italian entrepreneur Giovanni Agnelli and he also indicated that the family does not feel bound to holding its 30% stake in Fiat, despite a decades-old association with the company.
“It’s not unchangeable,” Agnelli reportedly said. However, he added according to AP, “We are all committed to supporting the revival of Fiat and to making it a good investment.”
Associated Press said the chairman was speaking less than three weeks after GM and Fiat announced a truce over the put option, pushing it back by one year from the 2004-9 window previously agreed while also pledging to hold off any legal action over the deal until December next year.
