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Fiat to Raise Chrysler Stake to 46% in Move to Gain Majority
Posted on April 21, 2011
European car deliveries have declined every month except one in the last year after the expiration of government cash for clunker programs damped demand. Photographer: Jeff Kowalsky/Bloomberg
The Fiat SpA company logo sits outside the headquarters in Turin, Italy. Photographer: Jason Alden/Bloomberg
April 21 (Bloomberg) — Fiat SpA (F) will raise its Chrysler LLC holding to 46 percent as part of a plan to take a majority stake in the American carmaker.
Fiat will pay $1.27 billion to raise its stake by 16 percent by exercising an option it has to purchase the holding, the Turin, Italy-based carmaker said today in a statement.
Fiat received an additional 5 percent in Chrysler from the U.S. government last week, giving it a 30 percent holding, by reaching targets that included opening Fiat’s dealerships in Brazil to the Auburn Hills, Michigan-based automaker’s products.
Fiat agreed with the U.S. government after Chrysler emerged from bankruptcy in 2009 to share technology and management in exchange for an initial 20 percent stake and performance goals to increase to 35 percent without paying any cash. It can buy the additional 16 percent after Chrysler repays government loans. Fiat said today Chrysler aims to complete its debt refinancing in the second quarter.
To contact the reporter on this story: Tommaso Ebhardt in Milan at tebhardt@bloomberg.net
To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net