Fiat buys remaining 41.5% of Chrysler for US$3.65bn from union

Italian car maker Fiat has struck a deal with the US auto union, the United Auto Workers (UAW), to buy the remaining portion of Chrysler for US$3.65 billion.

Currently, as part of a deal worked out by the US government during Chrysler’s venture in bankruptcy, Fiat owns 58.5 percent of Chrysler, with the remainder owned by the healthcare trust fund for retired workers setup by the UAW.

Under the terms of the agreement signed in the last day, Fiat will pay US$1.9 billion into that healthcare fund immediately. It will then pay a further $1.75 billion when the deal is finalised. Fiat will then pay a further US$700 million into the fund over the course of the next year.

The two parties had been sparring over Fiat’s desire to purchase the remaining stake in Chrysler for a little while now. The last act included a proposed listing on the stock exchange, an event that Fiat desperately wanted to avoid. Fiat has been keen to own all of Chrysler, as Chrysler has a pile of cash available, and steady cash flow thanks to its Ram pickup trucks and Jeep Grand Cherokee SUV, that will enable Fiat and Chrysler to develop a new generation of vehicles.

Derek Fung

Derek Fung

Derek has a lifelong love for all things automotive, from the dullest Camry to record shattering Bugattis. Prior to starting up Between the Axles he was a reviewer for CNET Australia and the founding editor of its Car Technology channel. [Read more]