BMW’s $1.2 trillion deal to buy Chrysler to become US automaker
By Michael O’Brien | 04.12.18 08:03AM ET | 05:04:00 60s,Classic Cars,Automobiles,Automotive,Car,Automobile source Fortune article BMW’s purchase of Chrysler will see the company take over as the US automaking giant’s largest shareholder in the nation’s second-largest automaker.BMW announced Friday that it will buy the struggling automaker for $1,260 per share, which is more than double its valuation of $531 per share in October.
That deal is expected to create a massive windfall for the two companies, which will each own more than 20% of Chrysler.
The deal will allow BMW to maintain its control over Chrysler and ensure that the American automaker continues to dominate the industry for decades to come.
The combined company will be the world’s third-largest automobile manufacturer by sales after General Motors and Ford.
The combined company’s profits will increase from $1 trillion to $1 and a half trillion dollars, BMW said in a statement.
The company also announced that it plans to create an independent investment arm and invest $1 billion annually in the combined company.BMWs investment in Chrysler will make it one of the biggest single investment-worthy companies in the United States, said Richard Branson, chairman and CEO of the Virgin Group.
It will allow it to pursue growth opportunities in new and growing markets while continuing to focus on its core values of sustainability, service, safety and quality.
Branson said that the deal will create new jobs and boost Chrysler’s bottom line, as well as help the company continue to create high-quality products for a global audience.
Brands such as General Motors, Ford and General Electric have been among the most aggressive in pursuing a takeover of the US carmaker.
They have invested millions of dollars in a takeover bid of Toyota, but failed to come up with a buyer.
The deal between BMW and Chrysler could lead to a similar outcome, but BMW is not the only big name seeking a stake in the industry.
The German automaker is also a major investor in Ford, which has also been looking for a buyer for some time.