Fiat to Boost Stake in Chrysler to 6517

Fiat to Boost Stake in Chrysler to 65.17%

Jan. 3, 2013
Cost will be $198 million.

ROME -- Italian auto giant Fiat (IW 1000/48) on Thursday said it was exercising its option to increase by 3.3 percentage points its stake in Chrysler to 65.17% for $198 million.

Fiat said the value of the purchase from a trust run by the UAW to pay health care benefits for Chrysler retirees was its estimate, which still had to be determined by a U.S. court.

In July, the Italian company said it was exercising its option to purchase another 3.3% tranche from the Voluntary Employee Beneficiary Association (VEBA) trust.

"Following the consummation of both purchases, Fiat will hold 65.17% of the outstanding equity in Chrysler," the company said in a statement.

Fiat took over operational command of the ailing automaker in June 2009, when Chrysler emerged from a government-supported bankruptcy following a collapse in sales amid the financial crisis.

In June 2011, Fiat took a majority stake of the company and Fiat boss Sergio Marchionne is now also chief executive of the Chrysler Group, though the two groups still operate independently.

Marchionne does not foresee a full merger before 2015.

Copyright Agence France-Presse, 2013

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