Deal between Italian and US manufacturers completed; new three-year plan to be revealed in May
Jim Holder
22 January 2014

Fiat has completed its buyout of Chrysler. The Italian manufacturer has taken control of the remaining 41.5 per cent of the US car marker it did not already own in a deal worth around £2.6 billion.

The agreement was struck earier this month, when Fiat was finally able to come to a deal to buy out the Veba union's pension trust. As part of the deal, Chrysler will give the trust a total of £425 million over the next four years.

The deal is seen as a significant breakthrough for Sergio Marchionne, chief executive of Fiat and Chrysler, as it allows him to avoid a clause that would have required him to offer Chrysler shares in a public offering if an agreement hadn't been struck.

As a result, Fiat is expected to be able to draw on Chrysler's technology more swiftly, and gain more from Chrysler's current profitability, which is in stark contrast to Fiat's struggles in Europe. In particular, the revival of Alfa Romeo is said to hinge on using Chrysler know-how.

"The unified ownership structure will now allow us to fully execute our vision of creating a global automaker that is truly unique in terms of mix of experience, perspective and know-how,” said Marchionne.

Chrysler officials have said the company still has "volume aspirations" in the UK following the deal, despite news that Fiat-owned Lancia will now move to selling cars solely within its home market of Italy. Models such as the Ypsilon supermini will continue to be sold in this country.

Veba had previously threatened to sell its shares on the open market rather than to Fiat, after the two sides valued its shareholding wildly differently. Fiat had offered £1.2bn, whereas Veba was demanding £3bn.

The future of the newly combined company, including where it will base its headquarters, will be decided at a board meeting at the end of this month. Marchionne is expected to reveal a new three-year plan for the business in May.

Join the debate


2 January 2014
The yanks will love that. Fiat Balancing the books of the american operations feeding the unprofitable european operations.

2 January 2014
If Fiat is in need of Chrysler tech then they are in more trouble than they look. This has to be about Fiat securing the US market ?

22 January 2014
Any news on the 159 replacement using a Chrysler / Dodge platform?

22 January 2014
Lol, chrysler tech ? Which bits exactly ? - the 1990s Merc based 300C platform, the 1980s Renault/early 2000s Mitsubushi based LH platform, or maybe the minivan platform that can trace its roots back to the 1980s (including leaf springs from the 18th century at the back!) ? ! Fiat is supposed to be helping chrysler out with its expertise, not the other way round, Jeez, the Alfa revival isnt going to go well (again) is it ?

XXXX just went POP.

22 January 2014
First off, VEBA isn't a union, it's a pension trust run by the UAW, which is.

Second, it's FIAT's know how which is aiding Chrysler - the Jeep Cherokee, Dodge Dart and new 2015 Chrysler 200 are all built on the same modular architecture from FIAT, shared with the Alfa Giulietta. Additionally, FIAT's World Class Manufacturing, automation programmes have been implemented across Chrysler's factories, with spectacular results (but after being starved of investment by DaimlerBenz then gutted by Cerberus, Chrysler were starting from a very low base)

Alfa's revival hinges not on Chrysler tech, but on access to the US market. Chrysler have an extensive, highly developed dealership and logistics system in place in the USA that will allow Alfa to get products to customers and provide local after-sales service too, but if the companies had remained separate entities, this would have required a lot of joint-venture agreements and other red tape.

22 January 2014
Actually, need to correct myself, after 2009 the Voyager/Town & Country/Caravan etc dragged itself into the 1970s by upgrading to a torsion beam at the back. Still hardly cutting edge tech.

XXXX just went POP.

23 January 2014
Why are they putting so much into Alfa which is about as sporty as SEAT or Hyundai. Alfa last had competition success in what year? Contrast with Lancia and it's rally success which, thanks to computer games, an entire new demographic of potential young customers know about. And yet the latest Delta turned it's back on that. If Alfa is the new success brand why have I still not seen one new Guilletta here in NZ when they have been TV advertised for over a year and yet 1 series BMWs and new Peugeots are common. Lancias had a rust problem back when Skoda made rust prone rear-engined cheapies ,yet now they have a better image than Saab or Renault thanks to VW. The only thing that ceases to surprise is Fiats ability to screw their brand's marketing up.

24 January 2014
Lets face it ALL Italian brands had rust problems in the 70s and 80s. Youre right, they have badly neglected Lancia, but just cos Alfa havent had a lot of competition success recently doesnt mean its not worth putting "much" into Alfa. They should simply put a lot into BOTH brands as they both have long, prestigious histories and BOTH need rejuvenating.

XXXX just went POP.

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