As if the transition didn’t appear seamless already, Fiat has just purchased their remaining balance in Chrysler in order to gain full control of the US-based automaker. The deal, reached over the new year, is a result of fund raising from trading in Milan and the purchase of a 41.5% stake in a United Autoworkers Retiree healthcare trust, partially owned by Chrysler.
How did Fiat pull this off? During the past year, their stock soared in value by 57%, and as the number three (and it’s a distant “three”) automaker in the US, Chrysler’s price tag is effectively a scant $1.75 billion for Fiat. This backdoor purchase includes a contribution of $1.9 billion from Chrysler to the trust along via a special dividend, paid in four annual installments of $700 million.
At the end of the day, Chrysler will have cost Fiat $3.7 billion since 2007, a far cry from the $36 billion Mercedes-Benz paid for the company in 1998.
– By: Sawyer Sutton