DETROIT – U.S. automaker Chrysler has now become fully owned by Italy's Fiat under a completed agreement announced Tuesday that also involves the United Auto Workers union.
The agreement comes more than 4-1/2 years after the Obama administration brought Fiat in to keep Chrysler in business as part of a packaged bankruptcy proceeding. Fiat announced Jan. 1 the coming deal to get full control.
Fiat said had agreed to pay pay $3.65 billion for the 41.46% of Chrysler it doesn't already own from the UAW's medical benefits trust for retirees.
In addition to the deal, Chrysler will contribute $700 million to the benefits trust over a 4-year period. For its part, the UAW has agreed to support the automaker's plans to roll out vehicles and will drop a Delaware court proceeding over options exercised by Fiat in the acquisition of Chrysler.
The full takeover of Chrysler by Fiat means it will not have to go ahead with plans for an initial public offering of Chrysler stock, which had been set to take place in the first three months of 2014.
Fiat had filed to offer the shares held by the UAW trust if it hadn't been able to reach a deal to repurchase the shares.
Chrysler has enjoyed great success under Fiat's ownership. It returned to profitability in 2011 and has been steadily improving sales and market share. Final 2013 sales figures are expected to show the company sold 2.6 million vehicles worldwide, up about 18% from 2012 and more than 70% from 2010, its first full year under Fiat's control.
The U.S. government also held a stake in Chrysler at the time it emerged from bankruptcy as compensation for the federal bailout the automaker received. But Treasury sold those shares back to Chrysler at a loss in 2011.