Fiat has acquired the remaining stake in Chrysler for US$4.35 billion ($4.94 billion), making the US brand now a wholly-owned subsidiary of the Italian car maker.
Acquiring a 41.46 per cent stake in Chrysler held by a United Auto Workers-affiliated retiree healthcare trust, the Fiat deal comprises US$3.65 billion ($4.15 billion) in cash – US$1.9 billion ($2.16 billion) from Chrysler and US$1.75 billion ($2 billion) from Fiat – and US$700 million ($7.95 million) to be paid in four equal annual instalments.
Originally announced on January 1, the acquisition deal with the Voluntary Employees’ Beneficiary Association (VEBA) will allow Fiat and Chrysler Group CEO Sergio Marchionne to pool the two manufacturer’s resources unobstructed after a year and a half of disputed talks.
Fiat chairman John Elkann reportedly said Marchionne would remain as CEO until at least the end of 2016, giving him time to manage the Fiat Chrysler merger.
Due to meet on January 29, the Fiat board is expected to finalise the terms of the merger and its corporate organisation including deciding on a new company name, where it will be headquartered, and its main stock listing.
Selling approximately 4.4 million vehicles globally in 2013, Marchionne, 61, has previously estimated that, combined, Fiat-Chrysler is the world’s seventh-biggest car maker. Last year General Motors sold 9.71 million units, Volkswagen 9.7 million. Toyota is yet to release its 2013 result, however, it took the title of best-selling brand in 2012 with a figure of 9.75 million.
Fiat started its accumulation of Chrysler stock in June 2009, expanding its stake to 53.5 per cent in 2011. Speaking to media at last week’s Detroit auto show, Marchionne said once the Chrysler merger was complete, Fiat would be open to additional partnerships with manufacturers such as PSA Peugeot Citroen and Suzuki Motor Corp.