Fiat shareholders are giving the green light to a merger between Fiat and U.S. carmaker Chrysler.
The goal of the merger is to help boost the auto companies' appeal to foreign investors, as well as pave the way for a U.S. share listing.
CEO Sergio Marchionne, who hopes to incorporate the two companies as Fiat Chrysler Automobiles, or FCA, completed the buyout earlier this year. The merger and the U.S. listing will help pay for Marchionne's 48 billion euro, or $64 billion, plan to increase the company's net profit by 500 percent by 2018.
"The birth of FCA will end the precarious life of Fiat," said Chairman John Elkann. "For the first time we have a different perspective: We don't need to play a game of survival."
The movement to create FCA was approved by the required two-thirds of the shareholders. Despite this, around 8 percent of Fiat shareholders voted against the merger, which could still fail if that 8 percent exercise their rights to sell.
Investors who did vote against the merger are entitled to cash exit rights of 7.727 euros, or $10.37, per share. If the total sum that is paid to shareholders exceeds $671.24 million, the merger will fail. Despite this, Marchionne expressed confidence that a large number of those who voted against the merger will remain shareholders for the FCA.
According to Fiat, the FCA, if completed, will be headquartered in London with its tax domicile being in Britain. This is a significant move for Fiat, which has been headquartered in Italy for 115 years. Fiat is currently a national symbol for Italy, and is one of the country's largest employers, with approximately 62,000 workers.
Marchionne was largely responsible for saving Chrysler in 2009, turning the company into a valuable asset for Fiat. The creation of FCA would be helpful in convincing investors that it can rival companies such as Ford and General Motors.
Current Fiat investors will own one FCA share for each Fiat share that they hold, and will also be eligible for special voting shares.
Ultimately, the outcome of the merger will be clear by October, and Marchionne has said that he will not attempt a U.S. listing until the FCA has been created.
The merger will ultimately not lead to significant savings on operational costs, and hence if the merger fails there will be little impact on Fiat operations.