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Credit Agricole teams up with Fiat for auto financing JV

Fiat Auto and Credit Agricole have reached an agreement for the creation of a 50/50 joint venture, Fiat Auto Financial Services (FAFS), which will carry out the main financing activities related to Fiat Auto in Europe.

FAFS activities will include Fiat Auto dealer financing, auto fleet lease and management services, as well as the retail auto financing activities now carried out by Fidis Retail Italia (currently 51%-owned by Banca Intesa, Capitalia, UniCredit and San Paolo-IMI).

In addition, the joint venture will offer new financial products to Fiat Auto customers and dealers, leveraging Credit Agricole’s financial portfolio of services. FAFS will operate in 13 European countries and will manage assets of approximately E13 billion.

Under the terms of the agreement, Fiat Auto will receive E1 billion in cash for 50% of FAFS, valuing 100% of the venture equity at E2 billion. The governance of FAFS will be shared between the two partners.

Credit Agricole and Fiat hope to finalize the deal by the end of the year. However, regulatory issues could delay final closing by up to a year.