Fiat in talks to buy rest of Chrysler for around $3 bn: report
28 May 2013
Italian carmaker Fiat SpA is in talks to buy the remaining 41.5 per cent stake in Chrysler, which it does not own, for around $3 billion, speculative media reports said today, giving a big boost to Fiat's shares, which jumped more than 4 per cent.
Italian newspapers said that the talks were in a final stage to buy the stake controlled by VEBA, the pension fund of US union UAW.
Italian daily newspaper Corriere della Sera said the best way for Fiat to raise money to fund the acquisition would be to raise capital ahead of a US listing of the merged group.
In 2011, Fiat became the majority shareholder of the Detroit-based carmaker after acquiring the US and Canadian governments' stakes in Chrysler, also bringing to an end a multi-billion bailout of the company in 2009.
Sergio Marchionne, chief executive of Fiat, had then said that he intended to merge the companies in order to reduce costs and achieve combined sales of $140 billion by 2014.
In a move to gain access to the US market, Fiat, Italy's largest carmaker, had acquired a majority stake from Chrysler dealers for a measly $625 million. But, through the deal, Chrysler got the small-car and clean-engine technology from Fiat and the Italian automaker's management expertise.