Fiat Secures Final Chrysler Stake On Road To Global Expansion

Fiat has confirmed this week that it will soon take the final steps to a complete takeover of Chrysler, started with an alliance announced in 2009.

The Italian carmaker first began building stock in Chrysler as part of a government and union-led bailout for the struggling company, culminating in a majority share in 2011.

The remaining share, a 41.46 percent stake held by United Auto Workers’ retirees’ healthcare trust VEBA, will be purchased at a cost of US$3.65 billion.

The purchase will be made up of a US$1.75 billion contribution from Fiat and US$1.9 billion from Chrysler - currently the more profitable arm of the alliance.

Once the deal closes, Chrysler will pay an additional US$700 million to the trust through four annual payments, contributing to the medical benefits of Chrysler retiree funds managed by VEBA. 

The deal, which will help to realise the global growth plans of Fiat and Chrysler boss Sergio Marchionne, is expected to close by January 20. 

"The unified ownership structure will now allow us to fully execute our vision of creating a global automaker that is truly unique in terms of mix of experience, perspective and know-how, a solid and open organization that will ensure all employees a challenging and rewarding environment," Mr Marchionne said. 

"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."

Fiat Chairman John Elkann echoed Marchionne's comments, adding that he has been looking forward to this day since the Fiat-Chrysler alliance was first announced.

"The work, commitment and achievement I have witnessed from Chrysler over the past four and a half years is nothing short of exceptional, and I take this opportunity to officially welcome each and every one of the people in the Chrysler organization to the integrated Fiat-Chrysler world."