Fiat reaches deal with UAW trust to buy rest of Chrysler
MILAN/DETROIT (REUTERS) - Italian carmaker Fiat SpA said on Wednesday it has signed an agreement to buy the stake in US automaker Chrysler Group LLC it does not already own, ending months of tense negotiations and allowing Chief Executive Sergio Marchionne to pursue his goal of creating the world's seventh-largest auto group.
Fiat will acquire the 41.46 per cent stake in Chrysler from a retiree healthcare trust affiliated with the United Auto Workers union, which will receive US$3.65 billion (S$4.61 billion) in cash for its stake.
Additionally, once the deal closes, Chrysler has committed to giving the trust an additional US$700 million.
The deal is a victory for Mr Marchionne, who wants to merge Fiat and Chrysler and create a more competitive automaker with a broader global reach. But he has been at odds with the UAW trust for more than a year over the value of Chrysler.