Italian automobile manufacturer Fiat SpA will acquire full control of Chrysler Group LLC in a deal worth a combined $4.35 billion, Bloomberg News reported.
Fiat, which already holds 58.5% of Chrysler, will [delete word pay] acquire the remaining 41.5% from a United Auto Workers retiree health-care trust that acquired its stake in Chrysler when the U.S. automaker exited its 2009 bankruptcy. The purchase price will be funded through a $1.9 billion special dividend from Chrysler, along with $1.75 billion in cash from Fiat, Bloomberg said.
In addition, Chrysler will pay the trust $700 million in four annual installments, with the first to be made when the deal closes. Fiat expects that to happen by Jan. 20, Bloomberg said. Fiat said money for the deal would come from its cash reserves, and said it likely will not need to launch a stock sale to close the acquisition.
The trust in 2013 forced Chrysler to prepare a stock sale, which was viewed by some as a move to pressure Fiat into increasing its offer price. That stock sale will no longer be necessary.
Once this deal is finalized, Fiat and Chrysler can fully merge their operations.
Chrysler and Fiat delivered a combined 4 million vehicles worldwide in 2012, Bloomberg said. That compares to 9.3 million worldwide deliveries by Detroit rival General Motors Co., 9.75 million from Toyota Motor Corp. and 9.07 million vehicles sold by Germany's Volkswagen AG, according to Bloomberg Industries data.
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