Fiat to Pay $500M for US Stake in Chrysler

The road Italian manufacturer Fiat built on its own, the road that will soon land it full control over American car maker Chrysler is almost complete, following the announcement made on Monday that an agreement on the price for which the US will sell its stake has been reached.

According to the agreement with the US Treasury, the 6 percent that are still in federal control will pass over to Fiat for $500 million. In addition, the US has agreed to sell the Equity Recapture Agreement entered into between UST and VEBA in 2009 for US$75 million.

“The agreement reached today marking the complete exit of the United States Treasury as a Chrysler Group shareholder does not lessen the sense of gratitude that we feel toward President Obama’s administration for believing two years ago in Chrysler’s partnership with Fiat,” Sergio Marchionne, Fiat and Chrysler CEO said after the agreement was reached.

“The acquisition of the UST’s rights under the Equity Recapture Agreement is a further demonstration of the trust we have in the future of Chrysler and its ability to continue on a path to take its rightful place in the global automotive industry landscape.”

The purchase of the 6 percent owned by the US to Fiat brings the Fiat's stake in Chrysler to 52 percent. By the end of 2011, Fiat is said to be planning another share acquisition, one that would land it a 57 percent stake. At the same time, and separately, the Italians are also pursuing the 1.7 percent owned by Canada as well.