Fiat bought the remaining 41.46 percent stake in Chrysler from a retiree healthcare trust affiliated with the UAW. The trust, known as a voluntary employee beneficiary association or VEBA, has received $3.65 billion in cash for the stake, $1.9 billion of which came from Chrysler and $1.75 billion from Fiat.
Chrysler has also committed to giving the UAW trust another $700 million in four equal annual installments, the first of which was paid in connection with the deal closure, Fiat said.
Fiat previously bought out the stake held by Canadian governments, so once the current deal closes, Fiat and Chrysler can be merged into a single company. The deal will unite the Fiat and Lancia brands and Alfa Romeo, Maserati and Ferrari, with Chrysler and Dodge mass market groups and Jeep.
Marchionne, a Canadian/Italian accountant, will remain as CEO through at least 2016 to pursue the merger of Fiat and Chrysler as part of a strategy to maintain earnings growth, Chairman John Elkann told journalists in Detroit on Jan. 13.
Marchionne has estimated that Fiat and Chrysler together are the seventh-biggest carmaker worldwide. The two companies sold about 4.4 million vehicles combined last year, about half the annual production of Volkswagen, GM, and Toyota.
Marchionne has said that the US has the best claim as headquarters for the new company and that, once the Chrysler combination is complete, Fiat would be open to additional partnerships with other carmakers, such as Peugeot Citroen and Suzuki Motor Corp. Chrysler, meanwhile, has reported solid earnings—$1.14 billion for the first three quarters of 2013, and nine consecutive profitable quarters.