Fiat acquires remaining stake in Chrysler from the UAW for $4.35 billion
Fiat SpA and the United Auto Workers trust fund has agreed on a deal. Fiat will acquire the remaining stake in Chrysler for $4.35 billion. Fiat SpA and the UAW retiree healthcare trust both shared ownership in Chrysler ever since the bankruptcy in 2009. Fiat owned 58.5% of Chrysler and has been wanting to acquire the rest for a while.
There has been a disagreement about the price since then. Chrysler filed documents about a public stock offering this past September as part of a strategy for the UAW trust to get a fair value on their stake. However, CEO Sergio Marchionne said that they may cancel their alliance with Chrysler if the UAW sold their shares on the public market.
Fiat is going to pay the UAW trust $1.75 billion in cash. Chrysler is going to pay $1.9 billion through a special dividend to complete the transaction for the 41.5% remaining stake. This deal should be closed by January 20th. Chrysler is going to pay the trust $700 million in 4 installments every year. The first installment will be paid once the deal closes.
“In the life of every major organization and its people, there are defining moments that go down in the history books,” said Marchionne in a statement. “For Fiat and Chrysler, the agreement just reached with the VEBA is clearly one of those moments.” Marchionne works as the CEO of both Fiat and Chrysler.
Fiat and the UAW are going to cancel their battle in court. Chrysler will not be pursuing a planned public stock offering anymore.