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Fiat reaches deal to buy Treasury’s Chrysler stake for $560M

03 June 2011 09:08 (UTC +04:00)

BakÄ± - APA-Economics. Italian automaker Fiat SpA agreed late Thursday to acquire the U.S. Treasury’s stake in Chrysler Group LLC for $560 million, ending the Obama administration’s involvement with the Auburn Hills automaker.

The move gives the Italian automaker a 52 percent majority stake in Chrysler. The U.S. exit ends a 30-month involvement of two administrations in saving the company from collapse, beginning with the Bush administration’s decision to bail out Chrysler with $4 billion in December 2008.

President Barack Obama will join Chrysler and Fiat CEO Sergio Marchionne at the company’s Toledo Supplier Park to tout the deal today.

"As Treasury exits its investment in Chrysler, it’s clear that President Obama’s decision to stand behind and restructure this company was the right one," said Treasury Secretary Tim Geithner.

Marchionne said the deal "accelerates our integration agenda designed to create a global, efficient and competitive automaker, and guaranteeing to our extended Chrysler family a sound future."

In documents signed late Thursday, Fiat agreed to pay $500 million for the U.S. government’s 6 percent equity stake in Chrysler. It is also paying $75 million for an option the Treasury held to acquire most of the rest of the company. Of that, $15 million will go to the Canadian government, which will hold a small equity stake.