Fiat buys (the rest of) Chrysler for $4.35 billion
All procedures are expected to be finalized by the end of January, when Fiat will become the seventh-largest automaker in the world
After months of negotiations, the Italian car manufacturer Fiat SpA, together with the United Auto Workers retiree health-care trust fund (UAW) signed a $4.35 billion deal to buy the remaining stake in Chrysler Group LLC. Thanks to this merger, Fiat is expected to become the seventh-largest automaker in the world, transforming itself into a global player able to directly challenge both General Motors and Volkswagen.
Fiat holds 58.5 percent of Chrysler since 2009, but the Italian company has always been interested in acquiring the remaining stake, although until now the two companies never managed to agree on a fair acquisition price.
Under the new settlement, Fiat Italian headquarter "will pay the trust $1.75 billion in cash, and Chrysler will contribute $1.9 billion through a special dividend to complete the transaction for the remaining 41.5 percent stake". All procedures are expected to be finalized by the end of January, and as soon as the acquisition will be completed, Chrysler will pay the first annual instalment of a $700 million trust the company agreed to pay in four years.
The Italian chief executive of both car manufacturers, Sergio Marchionne, commented on the agreement stressing that "in the life of every major organization and its people, there are defining moments that go down in the history books. [...] For Fiat and Chrysler, the agreement just reached with the VEBA [voluntary employee beneficiary association] is clearly one of those moments."
Similarly, the chairman of Fiat, John Elkann, highlighted that he has "been looking forward to this day from the very moment that we were chosen to assist in the rebuilding of a vibrant Chrysler back in 2009. [...] The work, commitment and achievement I have witnessed from Chrysler over the past four and a half years is nothing short of exceptional."