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Fiat completes purchase of Chrysler

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Italian carmaker Fiat has completed the purchase of US carmaker Chrysler in a $US4.35 billion ($A4.95 billion) deal that will create the world’s seventh biggest auto group.

As Reuters reports, on Tuesday Fiat said it had completed the acquisition of the remaining 41.46 percent stake in Chrysler from a retiree healthcare trust controlled by the US-based union, the United Auto Workers (UAW).

The trust, known as a voluntary employee beneficiary association, or VEBA, received $US3.65 billion in cash for the stake, $US1.9 billion of which came from Chrysler and $US1.75 billion from Fiat.

It is expected that the company will move its headquarters from Italy, where Fiat was founded 115 years ago. An announcement of the location is due to be announced at a board meeting on January 29.

Sergio Marchionne, the chief executive of both Fiat and Chrysler, said this month he was considering a possible listing on the Hong Kong or New York stock exchanges. He also said that the merged company would target the premium car market.

As the Business Spectator reports, Marchionne said that a convertible bond issue may be used to finance the new company. However, he said that this decision will be made by the board.

Image: ninemsn.com

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