Fiat North America has bought out the UAW trust's stake in the Chrysler Group, positioning it as a global automaker with the resources to take on General Motors and Ford Motor Co.
"The unified ownership structure will now allow us to fully execute our vision of creating a global automaker that is truly unique in terms of mix of experience, perspective and know-how, a solid and open organization that will ensure all employees a challenging and rewarding environment," said Sergio Marchionne, Fiat's CEO and Chrysler's chairman and CEO, in a statement announcing the deal.
Marchionne has been integrating Fiat and Chrysler since the Italian automaker acquired a 58.5% share in 2009 during the Chrysler bankruptcy. As a result of the partnership, Chrysler released the Ram ProMaster full-size van in October based on the Fiat Ducato and announced plans for the Ram ProMaster City compact van based on the Fiat Diablo. The ProMaster City will be available in late 2014.
Under terms of the $4.35 billion deal, Chrysler and Fiat North America will use cash on hand to buy the 41.5% stake from a United Auto Workers retiree health-care trust.
Fiat North America will pay the UAW-controlled VEBA Trust $1.75 billion in cash when the deal closes, while Auburn Hills, Mich.-based Chrysler will contribute $1.9 billion through a special dividend. Additionally, Chrysler will contribute $700 million in four future payments to the trust.
The deal essentially kills a public stock offering by Chrysler, an avenue the automaker was considering in late 2013. The deal is expected to close by Jan. 20, according to a Chrysler statement.