Fiat has announced it has signed a deal to buy out the rest of Chrysler, paying US$3.65 billion ($4.09b) for the 41.46 per cent holding owned by the United Automobile Workers (UAW) union's Voluntary Employee Beneficiary Association trust.
Chrysler will make a separate payment of US$700m ($784m) to the VEBA trust, which is set up to cover health care benefits for retired UAW members.
Fiat says the deal -- expected to finalise before the end of January -- means there would no longer be a need to raise extra capital with a public stock launch. A public launch was a move CEO Sergio Marchionne was keen to avoid, but which was threatened by the UAW last year after their dissatisfaction with the price Marchionne was offering at the time.
“In the life of every major organization and its people, there are defining moments that go down in the history books,” Marchionne said in the official statement. “For Fiat and Chrysler, the agreement just reached with the VEBA is clearly one of those moments.”
Since becoming CEO of Fiat 10 years ago, Marchionne has been keen on making the Italian brand a global giant with the acquisition of other stables. He said last year full ownership of Chrysler would make the joint brand the world's seventh largest.
Fiat first bought into Chrysler in mid-2011, buying shares held by the United States Treasury as the Detroit brand floundered. However the tables turned with the recent European economic crisis, and in 2013 it was booming Chrysler sales that supported the Italian brand as it struggled to make sales in Europe.
The operational joining of the two brands in Australia has seen a strong rise in sales for its cluster of brands over 2012, with Fiat up 598 per cent -- the little Fiat 500/Abarth itself up 331 per cent -- Alfa Romeo 156 per cent, Chrysler 134 per cent and Jeep 21 per cent. The only lagging brand is Dodge, down 22 per cent with a lack of product as models trail off.
The local HQ declined to comment on the buyout deal but said they were pleased with the year's results so far.
"We are thrilled with the sales performance across the Fiat Chrysler stable this year," Fiat-Chrysler spokesperson Karla Leach said. "Our dealers have performed amazingly to smash nearly every sales record for the group in 2013. Of note is the continued strength of the Jeep Grand Cherokee, and the massive growth of the much-loved Fiat 500, and the sassy Alfa Romeo Guilietta."
This reporter is on Twitter: @KarlaPincott