Fiat Purchases 3.3% More of Chrysler

FiatFiatItaly, 1899 > present159 models
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has exercised its options to buy 3.3% more of ChryslerChryslerUnited States of America, 1925 > present70 models
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and now owns 68.49% of the company's stock. Fiat's goal is to eventually own all of the American auto company. It purchased the stock from VEBA, the trust that runs the medical benefits for the United Auto Workers labor union. 

Since first taking 20% control in Chrysler in 2009, Fiat has slowly increased control in the company. The original agreement allows Fiat to buy 3.3% of Chrysler stock from VEBA every six months up to a limit of 75%. Chrysler has been performing well financially.

For June 2013, Chrysler's sales in the US increased by 8% over the previous June to 156,686 cars. The company's bestselling car in the US is the Ram 1500Ram Trucks 1500 Gen.1 [DS/DJ]United States of America, 2009 > present37 versions
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pick-up truck with 29,644 sales in June, and the Jeep Grand CherokeeJeep Grand Cherokee Gen.4United States of America, 2010 > present57 versions
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was its second bestselling car with 16,626 cars sold.

From January to June 2013, Chrysler has sold 908,332 in the US, a 9% improvement over the same period in the previous year.

Without its stake in Chrysler, Fiat would have lost €1 billion last year.

Fiat and VEBA are still debating the cost to purchase the remaining 25% of Chrysler that VEBA still holds. If Fiat purchases 3.3% of Chrysler every six months, it will reach 75% ownership in July 2014. 

"The talks have not produced any results so far, so we don't have anything to announce. If they accept our price, we could close this week," said Fiat CEO Sergio Marchionne.

A court in Delaware is still deciding the cost of the final portion of the Chrysler stock. Fiat values it at $4.2 billion, and VEBA values it at $10.3 billion. The valuation is based on what Chrysler was worth with Fiat took it over versus what VEBA believes it is worth now.

Fiat has been rumored to be dealing with banks to raise more money to offer VEBA for the stock in case the court does not side in its favor.

Source: Automotive News Europe