Proxy Advisor Urges “No” Vote on Fiat-Chrysler Merger

Holders of Fiat SpA stock should vote against the company's proposed merger with Chrysler Group LLC because the deal will reduce their rights, suggests international proxy advisor Institutional Shareholder Services Inc.

ISS notes that 30% of Fiat shares are now controlled by Exor, the holding company of the Agnelli founding family. Under terms of the merger, Exor's voting rights could grow to 46%, thus reducing the power of other shareholders.

Reuters notes that Italian proxy advisor Frontis Governance also recommends a "no" vote for the same reason.

The news service points out that international investors usually follow the recommendation of large proxy advisors. Fiat needs a two-thirds "yes" vote to finalize the merger. CEO Sergio Marchionne says he remains confident the deal will be approved.