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Chrysler Is Now an Italian Company with Fiat Gaining 100% Ownership

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Published on : Jan 02, 2014

Fiat, the leading Italian car maker announced on Wednesday that it has finalized a deal to take complete ownership of American automaker Chrysler. The USD 4.35 billion deal will also comprise the retiree health care fund of the United Automobile Workers. 

The deal is expected to draw to a final close around January 20, and will see Fiat gaining ownership of the pending 41% stake in Chrysler. This will catapult Fiat to the position of the seventh largest car maker globally, according to a report published in the New York Times.

The deal sees the end of several months and multiple rounds of negotiations between the two companies about reaching a consensus on the U.A.W’s stake in the value.

Since 2009, Fiat has been carrying a majority stake in Chrysler and the former had made it amply clear that it would eventually look to acquiring a 100% stake in the company. 

As per the terms of the deal, the trust will receive an amount of USD 1.75 billion in cash from Fiat and USD 1.9 billion from Chrysler. In addition to these payments, Chrysler will be paying another USD 700 million to the U.A.W on the final closing of the deal. This payment will be made in four installments annually.

This merger is yet another in the list of several big ticket mergers that made headlines in 2013. The corporate world in the U.S. has been witnessing a bullish run as far as M&As are concerned. In fact, certain market estimates place the value of the total M&A activities involving American companies 2013 at a whopping USD 1 trillion-this figure was 43% of all such deals worldwide.

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