Fiat to Increase Its Share of Chrysler to 65.2 Percent
General Motors and Ford are scrambling to minimize their exposure in the crumbling European market, closing or selling factories. Fiat is doing no better on the Continent, and is pushing to increase its stake in Chrysler, and the U.S. makes sense considering the Pentastar now has had 33 straight months of better year-over-year sales. In a financially technical statement that makes the small print in a credit card application read like a Dick and Jane story, Fiat is exercising an option to buy “approximately 3.3 percent of Chrysler’s outstanding equity.”
Those outstanding shares belong to the UAW Retiree Medical Benefits Trust (VEBA), through which the Italian marque has an agreement to purchase 3.3-percent stakes in Chrysler every six months through 2016 as a part of Fiat’s initial deal with the Detroit manufacturer. Fiat has put the value of this 3.3-percent stake at $198 million. When it’s all said and done, the latest chunk of stock would take Fiat’s stake in the U.S. automaker would climb to 65.2 percent.
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Just one little problem remains: money. Fiat valued the stake it purchased in July at $140 million. VEBA estimated those shares were worth $343 million. Last September, a Delaware Chancery Court was asked to provide a judgment to confirm the price and a determination is expected within a few months.
By John Lamm