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Christopher Bruce2014-01-02 13:10:41

Fiat Buys Remaining Chrysler Shares for $4.35 Billion

The deal is expected to be finalized by January 20

After years of negotiation, Fiat has finally completed its purchase of Chrysler

FiatFiatFiatItaly, 1899 > present159 models
4916 photos
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is celebrating a very happy new year with its announcement that it has signed a memorandum of understanding to buy the remaining shares of ChryslerChryslerChryslerUnited States of America, 1925 > present70 models
875 photos
1 video
from the United Auto Workers’ VEBA healthcare pension. In exchange for the shares Fiat will pay $3.65 billion for the Chrysler stake, and Chrysler will pay $700 million into VEBA for a total of $4.35 billion. Fiat expects for the deal to be finalized by January 20.

"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 is clearly one of those moments,” said Sergio Marchionne, Fiat and Chrysler CEO.

The deal also means that Chrysler will no longer submit an initial public offering and will not be listed on the New York Stock Exchange.

With ownership of Chrysler, Fiat gains access to all of the company’s factories in the United States, Canada and Mexico, which will increase Fiat production capacity significantly. It will also allow Fiat to take advantage of Chrysler’s positive profits to fund new vehicles for Europe and the rest of the world, and platforms will be able to be shared among all of the group’s brands.

The deal means that Marchionne is getting exactly what he wanted for a price even lower than he wanted to pay. In the years-long lead up to this deal, Marchionne had said that he wanted to pay less than $5 billion for Chrysler's remaining shares.

Combining the purchases of Chrysler stock from the US Treasury, Canadian government and this most recent purchase, Fiat’s total investment to buy 100% of Chrysler has been $6.3 billion.

Source: Automotive News





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