Fiat strikes deal to buy Chrysler stake for $1.75bn

Italy's Fiat said on Wednesday it had struck a deal to buy up the remainder of Chrysler from the US auto workers' pension fund for $1.75 billion (1.27 billion euros), paving the way for a full merger to create a new global auto giant. Fiat said the agreement was for the remaining 41.4 percent stake held by the UAW union's VEBA fund and Fiat chief executive Sergio Marchionne said the deal would "go down in the history books". "The unified ownership structure will now allow us to fully execute our vision of creating a global automaker that is truly unique," Marchionne, who is also the CEO of Chrysler, said in a statement. Fiat said it expected the transaction to be completed by January 20, completing a process that began in 2009 when Fiat first began planning a merger with Chrysler after it emerged from bankruptcy. Fiat said the total value of the deal with VEBA was $3.65 billion, including a $1.9 billion special distribution payable by Chrysler Group to its members and $1.75 billion in cash from Fiat itself. Fiat said it had also agreed on additional contributions by Chrysler to VEBA of $700 million in four equal annual instalments in return for a series of union commitments to support the Fiat-Chrysler alliance. "I have been looking forward to this day from the very moment that we were chosen to assist in the rebuilding of a vibrant Chrysler back in 2009," John Elkann, Fiat's chairman, said in the statement. Marchionne added: "In the life of every major organisation and its people, there are defining moments that go down in the history books. For Fiat and Chrysler, the agreement just reached with the VEBA is clearly one of those moments."