Fiat completes buyout of Chrysler

Chrysler is now a wholly owned subsidiary of Fiat. The $ 4.35 billion deal has been completed resulting in the formation of the seventh largest auto group in the world.

The Italian auto manufacturer bought out the remaining 41.46 % stake in the American car company, which was held by the Voluntary Employee Beneficiary Association (VEBA), a fund controlled by the US autoworkers’ union, United Auto Workers (UAW). The trust was paid $ 3.65 billion in total, out of which, $ 1.75 billion came from Fiat and $ 1.9 billion came from Chrysler. Additionally, Fiat has agreed to give the trust $ 700 million, which will be paid in four equal instalments. The first of these instalments has been paid with the closure of the deal.

Fiat has been making losses in Europe and its market has slumped from 9.3 % in 2009 to 6.2 % in 2013. The acquisition of the profitable Chrylser group is expected to turn things around for the company.

It is being speculated that the company’s headquarters will be moved out of Italy. This topic will be discussed at a board meeting scheduled to take place on January 29, 2014. The name of the new entity formed by the merger is also likely to be revealed after the meeting.

Source: Reuters