Fiat's chief executive officer Sergio Marchionne announced today that the carmaker from Italy will increase its stake in depreciating publisher firm, RCS Mediagroup. He said that the bold move was a long term investment.
The announcement came as a surprise to many, as Fiat became RCS Mediagroup's biggest backer with almost 20% stake - equal to an estimated Eur90 million or US$115.51 million. This is also equivalent to double the original stake of the company.
Several rumors on the reason of the stake increase surfaced. Some analysts believe that the raise was prompted by a planned partnership with News Corp, a company owned by Rupert Murdoch. Others, however, think that the move was initiated to trigger a consolidation in the publishing industry,
"We would not have made the investment if it were not strategic," confirmed Marchionne in a statement during a conference in Turin, Italy.
RCS has the rights to publish the influential Italian daily Corriere della Sera.
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