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by Brett Davis

Fiat has increased its Chrysler Group stake by five per cent, edging closer to a complete merger between the two companies. Fiat now holds 58.5 per cent stake in Chrysler.

In 2009, the US Government bailed Chrysler out of bankruptcy while Fiat invested around $2 billion. Part of the Fiat and bailout deal was to meet a set of investment levels over a period. This latest investment meets those agreements and will allow for a merger to take place.

The additional five per cent stake steps closer to tying the two companies together as part of Fiat and Chrysler CEO Sergio Marchionne’s plans. He has already helped turn Fiat around in recent years and wants to use Chrysler to become one of the top five or six automakers in the world. Marchionne recently said,

“The acquisition of a further five per cent of Chrysler is a fundamental step in completion of the integration between our two groups.”

The remaining 41.5 per cent of Chrysler lays in the hands of VEBA, a healthcare trust in connection with the United Auto Workers union. If VEBA decides to sell the last remaining stock, Fiat might find it difficult to buy the stake, given its 5.8 billion euro ($7.2 billion) net industrial debt (as of September).

Analysts say that Fiat doesn’t necessarily need to purchase the remaining stake as it already has control over Chrysler. Chrysler is very important to Fiat though, with the US brand accounting for 66 per cent of Fiat’s profits for Q3 of 2011.



    I think FIAT need a MASSIVE pat on the back for turning around a basket case

    Well done Sergio and his team!

    • Al

      Agreed, judging by the new jointly developed Dodge Dart, they’ve really done a great job.

      At first i thought that Fiat bit off more than it could chew, but they seem to be doing well and pulling both Fiat and Chrylser upwards.

      My folks had a 2008 Ritmo until 120,000km (trouble free with 1 warranty claim), and now have a 2011 Alfa Giulietta and i’ve recently bought a 2008 Fiat Punto sequential with 80,000km as a second car/ runabout – they’re great cars and just as reliable as any other car in this era.

  • Rick

    If they want to become one of the top 6 manufacturers in the world ,they are going to have to start having a good range of right hand drive vehicles

  • vx

    the chrysler logo in headline is no longer used, right?

  • Aaa

    FIAT love it. They milked $2b out of GM.