January 23, 2009 6:00 AM
Dealmaker of the Week: Sullivan & Cromwell's Scott Miller
Posted by Julie Triedman
In late December, Cerberus Capital Management, the owner of terminally ill Chrysler LLC, got an offer it couldn't refuse from Italian automaker Fiat SpA and its bold CEO, Sergio Marchionne. Fiat would provide Chrysler with access to its small-car technology and platform and to Latin American and European auto markets. All Fiat asked for in return was a stake in Chrysler and access to the American car market.
The plan was the brainchild of Marchionne, 56, a charismatic race car fanatic who managed to turn Fiat's fortunes around in just two years on the job.
Marchionne quickly pulled regular outside counsel Scott Miller, a Sullivan & Cromwell partner resident in Palo Alto, into the plan to lead the negotiations for Fiat.
The deal, as various news outlets have reported, can do a lot for Chrysler, especially given a February 17 deadline the Detroit-based carmaker faces to present a recovery plan to the U.S. government so that it can hold onto its bailout bundle.
Still, the real winner in this tie up is Fiat.
The Torino, Italy-based company (Fiat is an acronym for Fabbrica Italiana Automobili Torino), founded by Italy's Agnelli family, pays a grand total of $0 for U.S. market access that by many accounts will measurably boost its position and performance. The company may even acquire a greater stake in Chrysler in the coming years--possibly a majority stake.
Marchionne and team deserve credit for devising a strategy that, as the Los Angeles Times describes it, provides "a glimpse of the future of the auto industry, one that's a lot more global--and where everybody scratches each other's back."
Miller's relationship with Marchionne predates the latter taking the helm at Fiat. The 47-year-old lawyer handled a series of mergers for Algroup, a Swiss aluminum business, while Marchionne was CEO of the company. His first engagement for Fiat came a year after Marchionne joined the Italian auto maker--Miller advised Fiat on the termination of its alliance with General Motors in 2005. (A quick note: The American Lawyer named Miller a Dealmaker of the Year in 2004 for his work advising Alcan Inc. in its successful $7 billion hostile takeover of French aluminium conglomerate Pechiney SA.)
Miller's work on the matter at hand is far from over, he told us earlier this week. The agreement, announced as a letter of intent, is nonbinding, and several questions have not yet been resolved, including how much of a stake Cerberus and minority shareholder Daimler AG will cede to Fiat.
While we're not one to take sides, given the current state of the auto industry worldwide, we've been swayed by much of what we've read in favor of the alliance--there is, as Wired.com put it, a certain logic to this. And we admit, we're excited by the prospect, thanks to this agreement, of the nifty Fiat 500--the latest incarnation of Fiat's iconic Cinquecento--finally making it to U.S. shores.
Dealmaker of the Week is published Fridays in The Am Law Daily.
Hunton & Williams' Jerry Whitson, 1/9/09
Steven Tonsfeldt, 12/19/08
Weil Gotshal's Lori Fife, 12/5/08