Fiat Nabs Rest of Chrysler— at a Pretty Good Price
Deal will make Fiat world's 7th-largest auto group
By Arden Dier, Newser Staff
Posted Jan 2, 2014 7:39 AM CST
This July 8, 2012 file photo shows Chrysler's Fiat logo at an auto dealership in Springfield, Ill.   (AP Photo/Seth Perlman, file)

(Newser) – America's No. 3 automaker has gone Italian. Fiat yesterday announced it has struck a $4.35 billion deal with the United Automobile Workers retiree health care fund that will see it buy the 41.5% of Chrysler it doesn't own, the New York Times reports. Per the deal, which ends negotiations over the stake's value, Fiat will pay the trust $1.75 billion in cash, while Chrysler will kick in $1.9 billion, plus four yearly installments totaling $700 million. Fiat has held a 58.5% stake in Chrysler since its 2009 bankruptcy, and the merger will make Fiat the world's No. 7 automaker, just ahead of Honda.

When all is said and done, Fiat will have paid $3.7 billion for Chrysler—a pretty penny less than the $36 billion Daimler-Chrysler paid in 1998. But Reuters reports that concerns persist about the company's debt load. Though Fiat shares rose as much as 16% on the announcement, analysts say its debt will now be the highest of any auto manufacturer in Europe at $13.8 billion. Fiat's European sales have been on the decline, and Reuters points out that the deal will allow Fiat to merge Chrysler's cash pool with its own, which could provide Fiat with the money it needs to beef up its lineup. Chrysler, for its part, has seen its US 2013 sales rise 9.3% through November. The deal is expected to close Jan. 20.

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Showing 3 of 25 comments
Ezekiel 25:17
Jan 4, 2014 1:01 PM CST
My uncle owned a family auto center back in the 80's before Carter's 1920's depression and Reagan's vengeance did it in. Well, it didn't help Walmart opened a mile away either. So he had two mechanics. One of those mechanics hated Chrysler. It teaches you a lesson that you never, ever drive your car into the service bay without first checking in with the service adviser. If you drove a Chrysler into his bay, he would use several well chosen expletives and make you remove the pile of trash out of his work space. Evidently, the way he described it, was that Chrysler went to great lengths to make a mechanic's life a living hell.
tran_tor
Jan 3, 2014 8:38 AM CST
"In 2011, Treasury closed the books on its $12.5-billion bailout of Chrysler and took about a $1.3-billion loss." http://www.latimes.com/business/money/la-fi-mo-general-motors-bailout-treasury-stock-20131209,0,4629861.story#axzz2pLWmFDrV
OrneryPup
Jan 3, 2014 1:31 AM CST
Love my FORD F-150 !