Fiat to gain Chrysler majority by buying U.S. stake

Reuters ^ | 5/27/11

[markomalley]

Fiat SpA (FIA.MI) plans to exercise an option to buy the U.S. Treasury's stake in Chrysler, which paves the way for the Italian automaker to clinch a majority share in the company by early next month.

Fiat notified the Treasury of its intent on Friday. The purchase price will be based on the equity value of Chrysler agreed by Treasury and Fiat within 10 business days.

If Fiat and Treasury cannot settle on the price, the amount will be determined by two of three investment banks appointed by the company and the U.S. government.

The option would allow Fiat to increase its stake in Chrysler by 6 percent, Fiat said in a release on Friday.

Treasury confirmed that it received notice from Fiat, but declined to discuss the announcement further. The announcement comes ahead of President Barack Obama's planned visit to a Chrysler plant in Toledo, Ohio, next week.

This week, Fiat boosted its stake in Chrysler to 46 percent after repaying $7.6 billion in loans from the United States and Canada through a refinancing deal.

A deal with Treasury would bring its stake to 52 percent.

[newzjunkey]

Why did we “save” this “American” car company only to sell it to an Italian company at billions in losses?

[South Dakota]

we didn’t save Chysler, we saved the UAW union

[pallis]

I hope Fiat goes non union.

[muleskinner]

Fiat S500 Abarth - "The best small car in the World" - Jeremy Clarkson - Top Gear

And for some reason, the one we will get over here will have 30 more HP than the euro version.

[King Moonracer]

FIAT will rename Chrysler to FIAL. Fix It Again Lee.

[Pollster1]

If they dissolve the company and sell off the assets, I have no problem with buying a car made with what used to be Chrysler machinery. However, as long as there is an ongoing corporation, I will not buy any Chrysler or GM product of any kind and at any price. Nationalizing those companies was corrupt to the point of evil, the bondholders were ripped off by government decree and in violation of contract law and bankruptcy law, and I don’t deal with crooks. Those car companies deserve to be under a permanent boycott from all decent people.

[Ragnar54]

From the article:

"This week, Ron Bloom, the Obama administration's point man for auto restructuring, said Chrysler's payoff qualified it for "comeback of the year" and was also a feather in Obama's cap as he gears up for the 2012 presidential race"

From a previous article posted on FR:

The truth behind Chrysler’s fake auto bailout pay back

"So, to recap, the Obama Energy Department is loaning a foreign car company $3.5 billion so that it can pay the Treasury Department $7.6 billion even though American taxpayers spent $13 billion to save an American car company that is currently only worth $5 billion.

Oh, and Obama plans to make this “success” a centerpiece of his 2012 campaign. "