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Fiat shares climb on takeover rumour

Shares in Italian auto giant Fiat jumped by 1.91 percent to €7.745 in Milan on Thursday on a German magazine report of a possible takeover by Volkswagen that Fiat denied.

Fiat shares climb on takeover rumour
Fiat shares were also boosted by data showing a 5.4-percent rise in European auto sales in June. Fiat photo: Shutterstock

Fiat stock rose despite the market overall falling, with the benchmark FTSE Mib index down 1.49 percent in midday trading.

The shares were also boosted by data showing a 5.4-percent rise in European auto sales in June, confirming a recovery in a sector badly hit by the economic crisis.

Fiat rejected the report in Manager Magazin that said Volkswagen was looking into "a takeover or partial takeover" of its Italian-US competitor Fiat-Chrysler.

The magazine said Volkswagen was particularly interested in Chrysler and its US distribution network, while the Italian side could focus on luxury cars like Fiat's Ferrari brand.

Exor, an investment company controlled by the Agnelli family which has a controlling stake in Fiat, said: "There has been no discussion on a merger of Fiat with Volkswagen".

SEE ALSO: Fiat Chrysler lays out global push

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ECONOMY

Fiat promises no job cuts in return for state aid: report

Fiat Chrysler has agreed to the conditions laid down for a state-backed €6.3 billion euro loan, including a promise not to relocate or cut jobs, Italy's Sole 24 Ore daily said Sunday.

Fiat promises no job cuts in return for state aid: report
Robots manufactured by Comau are pictured on the assembly line of the Fiat 500 BEV Battery Electric Vehicle. Photo: AFP

The state auditor has approved the guarantee, but it still needs to be signed off on by the economy ministry, the paper said.

The request for state support on such a large loan has proved controversial, particularly with the company's corporate headquarters in Amsterdam.

FCA — which directly employs close to 55,000 people in Italy — has said the loan is essential to help the group's Italy operations and the whole industry to weather the crisis triggered by the coronavirus pandemic.

The company will commit to investing 5.2 billion euro in Italy on new and existing projects, and up to 1.2 billion euro on its 1,400 or so foreign suppliers, said Sole 24 Ore, Italy's financial newspaper.

 

FCA will also pledge not to cut any jobs before 2023.

The loan will be funded by Italy's largest commercial bank Intesa San Paolo and 80 percent guaranteed by export credit agency SACE, the daily said.

The government has said FCA would face sanctions if it failed to stick to the conditions laid down for loan. Sole 24 Ore said the fine for breaking the agreement could be in the region of 500 million euros.

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