Canadian Manufacturing

Fiat closes $3.65B acquisition of Chrysler stake owned by trust fund

Made payments of US$3.835-billion to United Auto Workers-controlled trust fund for stake in automaker

TURIN, Italy—Fiat S.p.A. has closed the US$3.65-billion acquisition of the remaining stake in Chrysler Group LLC announced early this month, making the Detroit brand a wholly-owned subsidiary of the Italian automaker.

According to Fiat, Chrysler made a special distribution payment of US$1.9-billion to the United Auto Workers (UAW) union Voluntary Employee Beneficiary Association (VEBA), while Fiat made a similar payment of US$1.75-billion to the same union-controlled trust fund for its 41.5 per cent stake in Chrylser.

Fiat said its portion of the deal was funded through cash reserves.

As part of the deal, the UAW entered into a memorandum of understanding with Chrysler under existing collective bargaining agreements where Chrysler would provide an additional US$700-million to the fund in four equal installments.

Fiat said Chrysler made the first US$175-million payment Jan. 21.

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