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Fiat seals Chrysler deal

January 2, 2014

Fiat has agreed to buy the remaining slice it did not own of the US car giant Chrysler. The deal, agreed with a stateside pensions trust, should strengthen the Italian firm’s credentials as an international player.

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Fiat logo on a keychain dangles next to the hood ornament of a Chrysler (Photo: Sean Gallup/Getty Images)
Image: Getty Images

The Italian carmaker Fiat said on Wednesday that it had agreed to buy the remaining stake in the US auto manufacturer Chrysler.

Fiat said it was to acquire the 41.46 percent stake from VEBA, a retiree healthcare trust associated with the US union United Auto Workers.

The deal ends months of tense negotiation over the value of Chrysler and allows Fiat's Chief Executive Sergio Marchionne to pursue his aim of creating a global player in the auto market.

In a statement from the Fiat headquarters in Turin, Marchionne hailed the deal as historic.

"In the life of every major organization and its people, there are defining moments that go down in the history books," he said. "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."

Spanning the continents

The combination is expected to put Fiat in a strong position to compete with rivals such as Volkswagen, Toyota and General Motors. While Fiat's main market is in Europe, Chrysler - the third biggest US carmaker after GM and Ford - now gives it a firm foothold in North America.

Fiat and Chrysler combined now cover a number of other marques, from Ferrari, Alfa Romeo, and Lancia to Dodge and Ram on the other side of the Atlantic.

Fiat's initial purchase of a stake in Chrysler was originally seen as a risky move, coming during the 2009 financial crisis. German auto-maker Daimler had failed to turn the US-based manufacturer around at the time.

Chrysler's profits have helped bolster Fiat in recent years amid an overall downturn in the European market. From an initial 20 percent stake, Marchionne gradually acquired more of the company, with the VEBA stake representing the final piece of the jigsaw.

VEBA is to receive $3.65 billion for its stake, with Chrysler giving the trust an additional $700 million, once the deal is closed. Fiat expects the transaction to be wrapped up by January 20.

rc/msh (AFP, dpa, Reuters)