Fiat to buy US Treasury stake in Chrysler

According to Italian automaker Fiat SpA it would buy the remaining stake of the US Treasury Department in Chrysler Group LLC, to free the automaker from ownership of the US government.

In a notification to the US Treasury Department, the Turin-based company said it would exercise an option to buy the government's 6 per cent stake. The price would be negotiated within 10 business days, or by around 10 June.

But analysts say, from the Italian company's statement yesterday, it was not clear when the sale would happen.

The company is looking to acquire a controlling stake in Chrysler, which it has run since the company emerged from bankruptcy protection in June of 2009.

The Canadian government holds a 1.7 per cent stake in the Auburn Hills automaker.

Fiat and the US Treasury would negotiate a price and if they failed to agree by 10 June, they agreed to accept the average of two estimates set by investment banks, according to a statement issued by Fiat.