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.
Don't Miss: Nintendo Switch: Everything You Need To Know
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.
Don't Miss: The Best HDR TVs