Fiat signs on the dotted line to buy the remaining Chrysler shares it's so desperately wanted since 2009.
There are going to be those who cheer this news, while others simply won't. After many months of working to make a deal, Fiat has agreed to pay $4.35 billion for the remaining Chrysler shares. In other words, Fiat now has total ownership over Chrysler. For months negotiations were taking place between Fiat, Chrysler and the UAW’s Retiree Medical Benefits Trust in order to reach an agreement. This deal effectively eliminates any immediate chance of Chrysler going for an initial public offering.
Before the ink was on the paper, Fiat owned 58.5 percent of Chrysler while the UAW Trust owned 41.5 percent. However, since 2009 CEO Sergio Marchionne wanted to merge the two automakers after Chrysler emerged from Chapter 11 bankruptcy. As part of this buyout deal, the UAW healthcare trust will receive $4.35 billion, with $3.65 billion coming from Fiat. The deal is especially vital for Fiat because it needs access to Chrysler’s cash to finance an upcoming and costly restructuring plan for its European operations, which will see new Maseratis and Alfa Romeos. So from now on, the automaker is officially called Fiat-Chrysler. Gotta get used to that.