Fiat has completed its planned acquisition of the remaining Chrysler shares it announced earlier this month, making the U.S. automaker a wholly-owned subsidiary of the Italian one.
photo credit: Himanshu Sarpotdar (wikimedia commons)
Enlarge Photoit announced earlier this month, making the U.S. automaker a wholly-owned subsidiary of the Italian one. The 41.46 percent stake was previously held by the United Auto Workers VEBA Trust.
Fiat and Chrysler will pay VEBA a total of $4.35 billion for the shares, with $3.65 billion paid up front. Of that, $1.75 billion will come from Fiat and $1.9 billion will come from Chrysler; the latter's operations are more profitable than those of Fiat, which is still struggling in its home market of Europe.
Chrysler will pay an additional $700 million into the VEBA Trust over the next four years. That puts the total valuation of Chrysler at approximately $10.5 billion, when the shares Fiat previously purchased are factored in.
The deal will finally allow Fiat and Chrysler to fully merge, allowing the two companies to pool cash reserves and further integrate product development. It also ends the speculation over Chrysler's future that has gone on since the dark days of the 2008-09 recession. Current Fiat-Chrysler CEO Sergio Marchionne is expected to helm the combined companies for at least three more years, perhaps seeing Chrysler move from recovery to genuine success.
The launch of the 2015 Chrysler 200demonstrates that the company is looking to address issues with its current products, while the Jeep and Ram lines continue to bolster Chrysler's profitability. Things should get interesting as Fiat's European models become more closely related to Chrysler's lineup, and enthusiasts look forward to the day when Alfa Romeo returns to the United States as a volume brand, perhaps by next year.
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