Fiat to purchase remaining U.S. stake in Chrysler, will increase it to 57%

Fiat SpA told the United States Department of Treasury today that it will buy the government’s remaining stake in Chrysler Group LLC, getting rid of the U.S. government’s ownership in the Auburn Hills automaker. Fiat told the U.S. Treasury that it will buy the government’s 6 percent stake, of which the price will be negotiated within 10 business days.

Fiat did not say when it will complete the stake. The move will give Fiat 52 percent ownership of Chrysler. That is expected to increase to 57 percent before the end of 2011 when Chrysler starts producing a 40 mpg compact car in the United States.

Earlier this week, Chrysler repaid its outstanding $7.6 billion U.S. and Canadian government loans.

Marchionne, who is the CEO of Chrysler and Fiat, said that Chrysler still has to go public and negotiate a new contract with the UAW this year.

– By: Omar Rana

Source: MSNBC