Fiat Ten Days Away From Majority Stake In Chrysler

May 27, 2011
Chrysler and Fiat logos

Chrysler and Fiat logos

By June 6, Fiat will own a controlling stake in American automaker Chrysler.

The Wall Street Journal reports that Fiat will exercise an option in its contract to invest in Chrysler, to buy a 6-percent stake held by the U.S. Treasury.

The purchase, to be executed within 10 days, eventually will raise Fiat's total stake in the Auburn Hills, Mich.-based automaker, to 57 percent.

Last week, Fiat paid $1.3 billion to boost its share in Chrysler after the automaker refinanced loans from the Federal government. And later in the year, the start of production of a 40-mpg small car jointly with Chrysler will add another 5 percent to the Italian automaker's stake, all for the 57-percent total.

With majority control, the WSJ points out, Fiat will be able to merge management teams now operating in parallel.

Beyond the financial moves in play, Fiat still can purchase the Canadian government's 1.7-percent stake in Chrysler, and a piece of the UAW's share, which it received in lieu of cash payments into a retiree healthcare fund set up before Chrysler filed for Chapter 11 bankruptcy in 2009.

[Wall Street Journal]
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