Fiat Soars After Gobbling Up Chrysler For $4.35 Billion

Posted: Jan 2 2014, 11:01am CST | by , in News


Fiat Soars After Gobbling Up Chrysler For $4.35 Billion
Photo Credit: Forbes

Fiat agreed to buy the rest of Chrysler on Wednesday for $4.35 billion from the United Auto Workers Trust, and investors are bullish on the prospects for what will be the world’s seventh-largest automaker. Fiat stock leaped over 15% on Thursday following the news, finishing the day at its highest point since 2011.

Fiat already holds 58.5 percent of Chrysler, but had been fighting with the UAW Trust over a fair price for the remaining share left after the US automaker’s 2009 bankruptcy. The trust threatened an IPO to raise the asking price, but ultimately Fiat CEO Sergio Marchionne got what he wanted, larger scale with a chance to threaten the world’s largest car manufacturers: Toyota, General Motors, and Volkswagen.

As reported by Forbes Detroit bureau chief Joann Muller, the deal is expected to close by January 20. Fiat will pay the trust $1.75 billion in cash, and Chrysler will contribute $1.9 billion through a special dividend to complete the transaction for the remaining 41.5 percent stake. In addition to the price for the stake, Chrysler agreed to pay the trust $700 million in four annual installments, with the first to be made when the deal closes.

The market must have expected a higher final price for Chrysler, because Fiat stock opened 15% higher on Thursday and finished at a share price of 6.92 Euros (in trading on Borsa Italiana exchange).

Competitors Volkswagen, Toyota, GM, and Ford all traded down slightly for the day.

Follow Brian Solomon on Facebook and Twitter.

The Best New American Cars

Source: Forbes

You May Like


The Author

Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.




Leave a Comment

Share this Story

Follow Us
Follow I4U News on Twitter
Follow I4U News on Facebook

You Also Like


Read the Latest from I4U News